This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on April 7, 2000, basing its approval solely on the facts and circumstances stated herein.

May an individual continue to serve as the attorney for a nonprofit economic development foundation after being appointed to the board of a port authority when the port authority appoints two of its own board members to the nonprofit foundation's board and also funds the nonprofit foundation?

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), (e), (f)(i)(ii), (g)(v), (h), (i), (l), (o) and (p)(i)(ii)(iii) 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.

(e) 'Compensation' mean money or thing of value received, or to be received, from any person for services rendered.

(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.

(i) 'Income' means money or thing of value received, or to be received, from any source derived, including but not limited to, any salary, wage, advance, payment, dividend, interest, rent, forgiveness of debt, fee, royalty, commission or any combination thereof.

(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.

(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(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 in the form of the requestor's letter, absent identifying data, are attached hereto and considered a part of this opinion.

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

The port authority's power to appoint two of its own members to the board of the nonprofit economic development foundation does not as such result in an immediate violation of the state conflict of interest laws due to the requestor being appointed to the port authority's board and continuing to serve as the nonprofit foundation's attorney. This is with the understanding that the requestor would not immediately be appointed to the nonprofit foundation's board by the port authority board.

Notwithstanding the above, the requestor's circumstance does present serious conflict of interest problems and public policy concerns due to the nonprofit economic development foundation being funded by the port authority.

Constitutional Section 109 and Code Section 25-4-105(2), cited above, prohibit a port authority board member from having an interest, direct or indirect, in any contract authorized by the port authority's board during the port authority board member's term and for one year thereafter.

The port authority's agreement to be a member of the nonprofit economic development foundation and to fund the nonprofit foundation is a "contract" as defined in the above cited Code Section 25-4-103(f)(i)(ii) and for purposes of Constitutional Section 109.

The Mississippi Supreme Court, in Frazier v. State, 504 So. 2d 675 (1987) and Cassibry v. State, 404 So. 2d 1360 (1981), held that an order of a public official's board that appropriates funds that directly or indirectly benefit the public official through a governmental contract is part of the contract authorization process.

The port authority's annual funding of the nonprofit economic development foundation is an appropriation of funds that authorizes a governmental contract, the joint memorandum of agreement and its statement of intent, as anticipated in Frazier, supra, and Cassibry, supra.

Furthermore, the requestor as the attorney for the nonprofit economic development foundation has an interest in the governmental contract between the port authority and the nonprofit foundation by way of his salary and/or other compensation.

Based on the above, Constitutional Section 109 and Code Section 25-4-105(2) will prohibit the requestor from continuing to serve as the attorney for the nonprofit economic development foundation should the requestor accept the appointment to the board of the port authority as the requestor will have a prohibited interest in the agreement between the port authority and the nonprofit economic development foundation due to the port authority's funding of the nonprofit foundation. [Emphasis added to bold text]

A violation of Constitutional Section 109 and Code Section 25-4-105(2) will occur when the port authority's board funds the nonprofit economic development foundation employing the requestor as its attorney with monies approved in a budget authorized by the port authority's board during the requestor's term of office or within one year thereafter. [Emphasis added to bold text]

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 a 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. [Emphasis added to bold text]

Regarding any period of time between the date the requestor takes office as a member of the port authority's board and the date the port authority's board approves and/or authorizes a budget funding the nonprofit economic development foundation, the requestor is advised to remain keenly aware of the above cited Code Section 25-4-105(1) should the requestor continue as the nonprofit foundation's attorney during such a period.

Code Section 25-4-105(1) prohibits a public servant, including a port authority board member, from using his official position to obtain a pecuniary benefit for himself, a relative or a business with which he is associated.

To avoid a violation of Code Section 25-4-105(1) during the period of time between the requestor taking office and the port authority's budget approval and/or authorization action, the requestor would have to totally and completely recuse himself from any matters concerning the nonprofit economic development foundation and its funding as a member of the port authority's board and from any matters concerning the port authority as the attorney for the nonprofit foundation.

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.

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

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 board member of a port authority simultaneously serving as the attorney for a nonprofit economic development foundation that is funded by the port authority is a circumstance that has the potential of creating suspicion among the public and reflecting unfavorably upon the port authority. Therefore, such a circumstance should be avoided.

Ronald E. Crowe

Executive Director