This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on May 4, 2001, basing its approval solely on the facts and circumstances stated herein.

May a current employee of a community hospital remain employed with the hospital if his parent is appointed to the board of trustees of the community hospital by the county board of supervisor?

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), (l), (p)(i)(ii)(iii) and (q) 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.

(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.

As we discussed by telephone on this date, I would like an opinion in writing concerning an appointment to the County-owned Community Hospital. I would like to appoint a person who has a child employed by the hospital in the maintenance department. This child has his own home and has been employed by the hospital for the past two years but I do not wish to have any conflicts with this appointment.

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

The appointment of the parent to the board of trustees of the community hospital may certainly result in a violation of the state conflict of interest laws due to the child's employment with the community hospital.

In order for the potential hospital trustee to avoid a violation of the above cited Constitutional Section 109 and Code Section 25-4-105(2), the potential hospital trustee's child must be totally and completely financially independent from the potential hospital trustee and the potential hospital trustee must have no interest, direct or indirect, in the child's employment contract with the county hospital.

The questions of whether the potential hospital trustee's child is financially dependent on the potential hospital trustee or the potential hospital trustee has an interest in the child's employment contract with the county hospital are critical in determining if there is an absolute conflict of interest or if there is not an absolute conflict of interest what the potential hospital trustee must do to avoid a conflict of interest from occurring.

The question of whether a supervisor's child is financially dependent upon the potential hospital trustee requires an evaluation of all the facts and circumstances.

Certainly, a child would be financially dependent on the potential hospital trustee should he live in his household or be receiving other financial assistance from him. The facts presented by the requestor indicate only that in this instance the child does not live in the potential hospital trustee's household.

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

Therefore, Constitutional Section 109 and Code Section 25-4-105(2) would prohibit the potential hospital trustee's child from remaining employed with the county hospital if the potential hospital trustee has an interest, direct or indirect, in the child's employment contract as described above.

Should the potential hospital trustee have a prohibited interest in his child's employment contract with the county hospital, the violation of Constitutional Section 109 and Code Section 25-4-105(2) would occur when the board of trustees of which the potential hospital trustee is a member approves a budget appropriating and authorizing funds for the child's employment with the county hospital.⁽¹⁾

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

In circumstances where a hospital trustee does not have a prohibited interest in his financially independent child's employment with the community hospital he serves, the hospital trustee still may violate the state conflict of interest laws. Specifically, the requestor is cautioned to advise the potential hospital trustee to remain keenly aware of the above cited Code Section 25-4-105(1) and Code Section 25-4-101.

Code Section 25-4-105(1), cited above, prohibits a hospital trustee from using his official position to obtain a pecuniary benefit for his child. To avoid using his official position to obtain a pecuniary benefit for his child, a hospital trustee must totally and completely recuse himself from subject matters providing a pecuniary benefit to his child.

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 in order 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.

Therefore, the potential hospital trustee if appointed would be required to recuse himself from any action coming before the hospital board of trustees that would result in an increase in his child's compensation or fringe benefits as an employee of the county hospital or that would result in a promotion or re-employment with the county hospital.

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 it is 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 appointment of an individual to a community hospital's board of trustees when the individual's child is an employee of the community hospital has the potential of creating suspicion among the public and reflecting unfavorably upon the county. Therefore, such a circumstance should be avoided whenever possible. However, Code Section 25-4-101 is another reason why the potential hospital trustee would be required to totally and completely recuse himself from all discussions, actions and decisions concerning his child's employment with the county hospital when such circumstances cannot be avoided.

Again, the requestor is cautioned to advise the potential hospital trustee that a recusal or an abstention will not prevent a violation of Constitutional Section 109 or Code Section 25-4-105(2).

The requestor is advised to also contact the State Attorney General's Office in order to determine if this circumstance will be affected by the state nepotism statute set forth in Section 25-1-53, 1972 Mississippi Code Annotated.
 

Ronald E. Crowe

Executive Director

1. The Mississippi Supreme Court, in Frazier v. State, 504 So. 2d 675 (1987), 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.