February 1, 2002
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 1, 2002, basing its approval solely on the facts and circumstances stated herein.
May a municipality provide funding to the Chamber of Commerce to carry out community promotions and productions of community events when the municipality’s mayor’s spouse serves on the board of the Chamber of Commerce?
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)(ii), (h), (l), (p)(i)(ii)(iii) and (q) 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:
(ii) Municipalities.
(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.
In the City, the Mayor is regarded as a member of the City Council and holds a casting vote only in case of tie Council votes. Traditionally, the City Council has provided budgeted municipal funds to the Area Chamber of Commerce for the items of community promotion and the production of community events.
The spouse of the Mayor is a professional educator that now serves as the volunteer Chairman of the Education Foundation of the City. This foundation deals with community-wide educational issues and awards college scholarships from private funds. By virtue of this chairmanship, the Mayor’s spouse has a seat on the Chamber of Commerce Board of Directors.
Noting past ethics advisories that restricts a City Council member or Mayor from serving on a board that the Council funds, may the spouse of a Mayor serve on this Chamber of Commerce Board?
The Commission formally adopts Advisory Opinions No. 93-113-E, No. 93-219-E, No. 00-016-E and No. 01-050-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.
The requestor is advised that this Commission has consistently held that mayors are board members for purposes of the conflict of interest laws. They are considered working members of their municipal boards with discretion and superintending powers and duties affecting their municipalities. Specifically, they have the duty to preside at all meetings of their boards, the power to veto actions of their boards and to give deciding votes.
As set forth in the attached Advisory Opinions No. 93-113-E and No. 93-219-E, Constitutional Section 109 and Code Section 25-4-105(2), both cited above, prohibit a public official, including a mayor, from serving as a board member of a Chamber of Commerce funded by the governing board of which the public official is a member.
The prohibition results from the public official, such as mayor, having an interest in agreements between the public official’s governmental entity and the Chamber of Commerce to perform the agreed upon services in return for the governmental entity’s funding by way of his fiduciary responsibility to the Chamber of Commerce as its board member.
As set forth in the attached Advisory Opinions No. 00-016-E and No. 01-050-E, Constitutional Section 109 and Code Section 25-4-105(2) prohibit a governing board from funding a not-for-profit organization to provide agreed upon services when the not-for-profit organization has a compensated director, officer or employee who is the spouse of a member of governing board.
This finding is based on the public official, such as a mayor, having an indirect interest due to his spouse’s direct interest as the not-for-profit organization’s compensated director, officer or employee.
The conflict of interest laws apply to a Chamber of Commerce in the same way as to the not-for-profit organizations addressed in the attached Advisory Opinions No. 00-016-E and No. 01-050-E.
The issue not addressed in the attached advisory opinions is whether Constitutional Section 109 and Code Section 25-4-105(2) prohibit a spouse of a public official, such as a mayor, from serving as an uncompensated member of a Chamber of Commerce when the public official’s governing board is appropriating funds to the Chamber of Commerce to provide agreed upon services, such as community promotions and productions of community events.
In other words, does the mayor have an indirect interest prohibited by Constitutional Section 109 and Code Section 25-4-105(2) in the municipality’s agreement to fund the Chamber of Commerce to carry out community promotions and productions of community events because of the mayor’s spouse’s direct interest resulting solely from the spouse’s fiduciary responsibility to the Chamber of Commerce as its board member.
It is this Commission’s opinion that the mayor does not have an indirect interest prohibited by Constitutional Section 109 and Code Section 25-4-105(2) in the municipality’s agreement to fund the Chamber of Commerce to carry out community promotions and productions of community events because of the mayor’s spouse’s direct interest resulting solely from the spouse’s fiduciary responsibility to the Chamber of Commerce as its board member.
This finding is based on the following. First, the mayor has no fiduciary responsibility unless the mayor is personally serving as the Chamber of Commerce board member. Second, the mayor does not have the obvious benefit that results from compensation paid his spouse.
The requestor is advised that this finding is applicable only in instances such as the one presented herein, where the funding provided by the municipality goes to items that have a public purpose which the municipality has a statutory authority to fund.
Therefore, Constitutional Section 109 and Code Section 25-4-105(2) will not prohibit the municipality’s funding of the Chamber of Commerce to carry out community promotions and productions of community events because the mayor’s spouse serves as an uncompensated member of the Chamber of Commerce board of directors.
Notwithstanding the above, the requestor is advised 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) prohibits a public servant, including a mayor, from using his official position to obtain a pecuniary benefit for a business with which he is associated.
The Chamber of Commerce is a business with which the mayor is associated as it is a not-for-profit organization that receives public funds and the mayor’s spouse is one of its directors.
Therefore, the mayor must totally and completely recuse himself from any matter coming before the municipality’s governing authority that concerns the municipality’s funding of the Chamber of Commerce.
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.
Code Section 25-4-101, set forth above, 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 mayor’s participation in his municipality’s funding of the Chamber of Commerce when his spouse is a director of the Chamber of Commerce is a circumstance having the potential of creating suspicion among the public and reflecting unfavorably upon the municipality.
Therefore, this is another reason why the mayor must totally and completely recuse himself from anything coming before the municipality’s governing authority that concerns the municipality’s funding of the Chamber of Commerce.
As a precaution, 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 mayor’s involvement, the authorization by the mayor’s city
board nonetheless results in a contract in which the mayor has a prohibited
interest.
Scott Rankin
Executive Director