This Advisory Opinion concerns the following issues as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on March 2, 2001, basing its approval solely on the facts and circumstances stated herein.

ISSUE 1. May a state coordinating council and its designated selection committee approve a bid to provide services for the establishment of a strategic plan when the bid includes as a subcontractor a center at a state university and when employees of that state university are designated members of the state coordinating council by state statute?

ISSUE 2. May a state coordinating council and its designated selection committee approve a bid to provide services for the establishment of a strategic plan when the director and a contract employee of a state entity that has competed with the losing bidder for other projects participated in the bid selection review process and when the director of the state entity is designated a member of the state coordinating council by state statute?

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(a), (b), (c), (d), (e), (f)(i)(ii), (g)(v), (h), (i), (j), (k)(i)(ii), (l), (m), (n), (o) and (p)(i)(ii)(iii) states:

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

(b) 'Benefit' means any gain or advantage to the beneficiary, including any gain or advantage to a third person pursuant to the desire or consent of the beneficiary.

(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.

(j) 'Intellectual property' means any formula, pattern, compilation, program, device, method, technique or process created primarily as a result of the research effort of an employee or employees of an institution of higher learning of the State of Mississippi.

(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);

(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.

(m) 'Person' means any individual, firm, business, corporation, association, partnership, union or other legal entity, and where appropriate a governmental entity.

(n) 'Property' means all real or personal property.

(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), (2), (3)(a)(b)(c)(d), (4)(b)(c)(d) and (5) 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.

(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.

(b) Be a purchaser, direct or indirect, at any sale made by him in his official capacity or by the governmental entity of which he is an officer or employee, except in respect of the sale of goods or services when provided as public utilities or offered to the general public on a uniform price schedule.

(c) Be a purchaser, direct or indirect, of any claim, certificate, warrant or other security issued by or to be paid out of the treasury of the governmental entity of which he is an officer or employee.

(d) Perform any service for any compensation during his term of office or employment by which he attempts to influence a decision of the authority of the governmental entity of which he is a member.

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

(b) May be a contractor or vendor with any authority of the governmental entity other than the 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 or vendor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent where such contract is let to the lowest and best bidder after competitive bidding and three (3) or more legitimate bids are received or where the goods, services or property involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.

(c) May be a subcontractor with any authority of the governmental entity other than the 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 subcontractor with any authority of the governmental entity of which he is a member, officer, employee or agent where the primary contract is let to the lowest and best bidder after competitive bidding or 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.

(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.

(5) No person may intentionally use or disclose information gained in the course of or by reason of his official position or employment as a public servant in any way that could result in pecuniary benefit for himself, any relative, or any other person, if the information has not been communicated to the public or is not public information."

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.

In addition to the facts set forth in the requestor's letter, the Commission's staff was advised of the following facts.

ISSUE 1.

Of the two coordinating council members who are employed by the state university that established the center, neither was involved in the review, selection or approval of the proposals as they both recused themselves.

One of the coordinating council members who is employed by the state university that established the center was involved as a member of the project team that developed the RFP. The member's involvement with the development of the RFP was obviously before the submission of either of the two proposals.

The coordinating council member who is employed by the state university that established the center and who was a part of the project team is also the vice president of the division where the center is located and serves on a four person board that oversees the center. However, the member stated that he receives no compensation or income from the operation of the center.

The coordinating council member who is employed by a state university other than the one that established the center did participate as a member of the selection team that evaluated the proposals. However, this member did recuse himself once the losing bidder began the protest. His involvement with the selection team was therefore limited to the first two stages of the six stage review process. Also, this member obviously has no personal or pecuniary interest in the center as he is employed with an entirely separate state university than the one that established the center.

ISSUE 2.

The losing bidder is alleging a conflict of interest existed due to the involvement of the state entity's director and contract employee in the bid selection review process because the state entity and the losing bidder routinely compete for projects.

The state entity's director contends that to the best of his knowledge the state entity has never competed with the losing bidder for any related services and that the state entity only works for governmental entities.

The state entity's director contends that the contract employee's presence at the coordinating council or related functions was only as an advisor to the state entity's director.

The Commission formally adopts Advisory Opinions No. 98-037-E and No. 91-055-E in response to this request and by attachment incorporates them into this opinion.

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

First, the requestor in the attached letter asks the following question.

Did the process followed by the coordinating council and their designated selection committee, as directed by [the state agency] and described above, constitute a violation of the Mississippi Ethics Law?

The requestor is advised that the responses to ISSUE 1 and ISSUE 2 will answer the above question. In other words, if the presence of the state university employees on the coordinating council and the representation of the state entity's director and contract employee [its former director] on the council and its selection committee/team does not violate the state conflict of interest laws if the current recommended bid is finally selected, then obviously the process followed by the council and its selection committee does not in and of itself violate the state conflict of interest laws.

ISSUE 1. Constitutional Section 109 and Code Section 25-4-105(2), both cited above, provide that a member of a governmental body or board may not have an interest, direct or indirect, in a contract authorized by his or her governmental body or board during his or her term or for one year thereafter.

There is no information provided by the requestor that reveals that the state university members of the coordinating council will personally or pecuniarily benefit from the selection of the bid which has the state university's center included as a subcontractor. In fact, the vice president of the division where the center is located is the only coordinating council member who has any apparent involvement with the center. However, the vice president states unequivocally that he receives no income or compensation from the operation of the center.

As set forth in the attached advisory opinions, the conflict of interest laws are intended to confront and prohibit private interests competing with public interests. As the facts reveal no personal or pecuniary interest accruing to the state university employees by way of the coordinating council's approval of the bid in question, their only interest would be that the state university's center is a subcontractor. That interest is public and not private and therefore Constitutional Section 109 and Code Section 25-4-105(2) are not violated.

Code Section 25-4-105(3)(a), cited above, provides that no public servant shall have a material financial interest in any business that is a contractor, subcontractor or vendor with the public servant's governmental entity.

Code Section 25-4-105(3)(a) is not applicable in this instance. The state university, its departments nor its center are businesses as anticipated by Code Section 25-4-105(3)(a).

Even if the prohibition in Code Section 25-4-105(3)(a) were applicable, the facts reveal that the state university members do not have a material financial interest in the center as anticipated in the above cited Code Section 25-4-103(k).

In addition to the above, the university employees' recusals from the bid selection process avoid the need for discussion of any other prohibitions of the state conflict of interest law due to the bid including the state university's center as a subcontractor.

Based on the above, the university employees' representation on the coordinating council as mandated by state statute does not disqualify the bid that includes the state university's center as a subcontractor.

ISSUE 2. Constitutional Section 109 and Code Section 25-4-105(2) and (3)(a) are not violated by the director of the state entity serving on the coordinating council for the same reasons as stated in ISSUE 1.

In addition, the requestor set forth in the submitted facts that the state entity "is not a party or partner in either of the proposals submitted for this project." Therefore, there is also no question presented regarding an interest, direct or indirect, or a material financial interest.

Also, the fact alone that the state entity might routinely compete with the losing bidder does not rise to the level of a violation of the state conflict of interest laws nor to the level of a public policy concern because of the involvement of the state entity's director and its contract employee in the bid selection review process. Notwithstanding this finding, it is critical to note that the state entity director contends that he has no knowledge of the losing bidder and the state entity competing for related services.

Based on the above, the representation of the state entity's director on the coordinating council as mandated by statute and on the selection committee/team and the representation of the state entity's contract employee [its former director] on the selection team do not standing alone constitute a conflict of interest violation in the selection process.

 
Ronald E. Crowe

Executive Director