This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on February 4, 2000, basing its approval solely on the facts and circumstances stated herein.

May the employees of a state university make travel arrangements through a travel agency owned by an employee of the state university when the employee's travel agency will be paid by the state university with state funds?

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:

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(a), (c), (f)(i)(ii), (g)(v), (h), (k)(i)(ii), (o) and (p)(i)(ii)(iii) states:

"(a) 'Authority' means any component unit of a governmental entity.

(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.

(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:

(v) Any department, agency, board, commission, institution, instrumentality, or legislative or administrative body of the state, counties or municipalities created by statute, ordinance or executive order including all units that expend public funds.

(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.

(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).

(o) 'Public funds' means money belonging to the government.

(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."

Code Section 25-4-105(3)(a) and (4)(d) states:

"(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.

(4) Notwithstanding the provisions of subsection (3) of this section, a public servant or his relative:

(d) May be a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent: (i) where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws; or (ii) where the contractual relationship involves the further research, development, testing, promotion or merchandising of an intellectual property created by the public servant."

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

As a result of the change in the travel policy for state employees, the university is informing its employees that they may obtain tickets for travel and make other work-related travel arrangements, which will be paid for with state funds, from the best source.

The city has three travel agencies: travel agency A, travel agency B, and travel agency C. Travel agency A is owned by an employee who is employed as a director in the athletics department. His spouse manages the business.

The university employee purchased travel agency A several years ago. At that time, the university employee was not an employee of the university, nor was his spouse. The university employee assumed his present position as a director in the athletics department approximately four years ago.

Many faculty and staff of the university have expressed a desire to be able to make their business travel arrangements with travel agency A because of the good service travel agency A provides. Before such permission is given by the university, we need to be sure that permitting state employees to make travel arrangements through an agency owned by a university employee is permissible.

The university seeks an opinion on the following question:

Is it permissible for employees of the university to make travel arrangements which will be paid for with state funds through a travel agency owned by an employee of the university?

If permitting university employees to make travel arrangements through this agency is permissible under guidelines which the Commission might wish to establish, please know that we will be diligent and faithful in adhering to any such conditions.

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

Code Section 25-4-105(3)(a), cited above, prohibits a business in which a public servant has a material financial interest from being a contractor, subcontractor or vendor with the governmental entity of which the public servant is an employee.

The state university employee is a public servant within the definition set forth in 25-4-103(p), cited above, as he is employed by the state university which is his authority of the state governmental entity.

The facts presented by the requestor clearly indicate that the state university employee has a material financial interest as defined in Code Section 25-4-103(k), cited above, in the travel agency as he is the owner and he and his spouse are compensated by the travel agency.

Code Section 25-4-103(f)(i)(ii), cited above, defines a contract for purposes of the state conflict of interest laws. Specifically, a contract is any agreement to which the government is a party or any agreement on behalf of the government which involves the payment of public funds.

The state university's approval of its employees' travel and its payment with public funds of its employees' travel arrangement costs with the travel agency owned by the university employee result in a contract on behalf of the government as anticipated in the definition of contract set forth in Code Section 25-4-103(f).

In addition, the new state travel policy sets forth in the category entitled Better price than State Contract requires that the state agency/institution head shall determine the limit to be placed on travel agency administrative fees if a state employee does not use the established state contract prices for travel fares. This requirement in the state travel policy results in state governmental authorities being included in the travel agreements with travel agencies used by their employees when the travel arrangements are paid for with public funds.

The circumstance described above is self-evident of a contract relationship that results in a contractor relationship between the state university and the state university employee's travel agency as anticipated by Code Section 25-4-105(3)(a).

Therefore, Code Section 25-4-105(3)(a) will prohibit the employees of the state university from making travel arrangements with the state university employee's travel agency which will be paid for by the state university with public funds.

The only exception applicable in this circumstance is set forth in the above cited Code Section 25-4-105(4)(d). That exception is where only two (2) or fewer commercial sources for the service or goods are reasonably available, provided such transactions comply with the public purchases laws. The facts presented by the requestor clearly indicate that this exception will not apply in this circumstance. In addition, it is the Commission's opinion that the geographical boundary of a local governmental entity is not sufficient by itself to set in motion the above exception. In most if not all areas of the state, goods and services are reasonably available in a neighboring city, county or district.

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 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.

Clearly, a state university employee's travel agency making travel arrangements for state university employees that will be paid for by the state university with public funds is a circumstance that has the potential of creating suspicion among the public and reflecting unfavorably upon the district attorney's office. Therefore, such a circumstance should be avoided in order to fully comply with the public policy mandate set forth in Code Section 25-4-101.
 
 
 
 

Ronald E. Crowe

Executive Director