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 the executive director of a nonprofit corporation continue to serve on the county human resource agency board when the county human resource agency has been awarded a HUD grant that required several local agencies to agree to partner with the county human resource agency one of which is the nonprofit corporation?

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(f)(i)(ii), (g)(i)(v), (h) and (p)(i)(ii)(iii) states:

"(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:

(i) Counties; and

(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.

(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(2) states:

"(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.

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 any contract authorized by the governmental board of which he or she is a member during the board member's term and for one year thereafter.

The county human resource agency board is a governmental board for purposes of Constitutional Section 109 and Code Section 25-4-105(2).

The grant, itself, and the nonprofit corporation's agreement to provide services in support of the grant are contracts for purposes of Constitutional Section 109 and Code Section 25-4-105(2), as well as, the above cited Code Section 25-4-103(f)(i).

Further, it is the position of this Commission that the grant and the related additional support agreements require the authorization of the county human resource agency's board regardless of whether such authorization is specific or general.⁽¹⁾

The executive director has a personal and fiduciary interest in the nonprofit corporation's contracts/agreements with the county human resource agency as the chief executive officer of the nonprofit corporation.

Therefore, Constitutional Section 109 and Code Section 25-4-105(2) will prohibit the executive director from continuing to serve on the county human resource agency's board because of the executive director's interest in the grant and/or the additional support agreement involving the nonprofit corporation if the grant and/or additional support agreement were authorized by the county human resource agency board during the executive director's term.

Because the prohibition will apply for one year after the executive director's term on the county human resource agency's board expires, Constitutional Section 109 and Code Section 25-4-105(2) will prohibit the nonprofit corporation's participation in the grant by way of the additional support agreement for one year after the executive director leaves the county human resource agency's board.

The requestor is cautioned to advise the board member 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.

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, the executive director of a nonprofit corporation which has as its primary purpose providing local human services serving on a county human resource agency's board when the nonprofit corporation will certainly be expected to seek funding or other support from the county human resource agency, as well as, contractual arrangements with the county human resource agency is a circumstance having the potential of creating suspicion among the public and reflecting unfavorably upon the county human resource agency. Therefore, such a circumstance should be avoided to fully comply with the public policy mandate set forth in Code Section 25-4-101.

Ronald E. Crowe

Executive Director

1. § 17-15-5. Powers of board; executive director. The powers of the governing board of every human resource agency shall include the power to adopt bylaws, to appoint persons to senior staff positions including the appointment of an executive director, to determine major personnel, physical and program policy and approve overall program plans and priorities and to assure compliance with conditions of and approve proposals for financial assistance over this chapter. The executive director shall hold office at the will and pleasure of the governing board and his employment may be terminated at any time by a majority vote thereof and his salary shall be fixed by the board.