This Advisory Opinion concerns the following issues as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on September 6, 2002, basing its approval solely on the facts and circumstances stated herein.
 

ISSUE 1: May members of a city visitors and conventions council and a county economic development authority, whose organizations established a non-profit economic development joint venture partnership, serve as board members of that non-profit partnership?

ISSUE 2: May a county development authority contract with a non-profit economic development joint venture partnership while board members of the county development authority serve on the non-profit partnership’s board?

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(e), (f)(i)(ii),(g)(i)(ii)(v), (h), (l), (m), and (p)(i)(ii)(iii) state:
 

“(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:
 

(i) Counties;

(ii) Municipalities; 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.

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

(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) and (5) state:
 

“(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.

 
(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 provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.
 

Last fall you were kind enough to visit with me regarding the creation of our Greater City Development Partnership, an economic joint venture consisting of the Private Sector through the City Area Chamber of Commerce, Inc.; Public/Private Sector involving  the City Visitors and Conventions Council; and the Public Sector represented by the County Economic Development Authority.

When I visited with you last fall, you provided me with several ethics opinions dealing with members of the Public Board also serving on a Private or Public/Private Board and whether or not such cross-membership would constitute any conflict of interest or violate any applicable ethics statute.

Although the advisory opinions you provided to me seemed quite clear I would like to take this opportunity to request a formal opinion of the Ethics Commission regarding the membership of our Greater City Development Partnership and the fact that the Board Members serving on the Board or Boards of one or more of the partners may also serve on the Partnership Board.

To facilitate your review I am enclosing a copy of the Amended and Restated By-Laws of the Greater City Development Partnership together with a listing of the current Board and the office or offices they hold in the three organizations to make up the Development Partnership.  Finally, I am enclosing a copy of the Marketing and Management Contract currently existing between the County Economic Development Authority and the Greater City Development Partnership.  A separate request has been made of the Attorney General for an opinion regarding the scope of the Marketing and Management Contracts between the County Economic Developments Authority and the Partnership.

As stated in the By-Laws for the Greater City Development Partnership, no Board Member or Officer receives any compensation through the partnership.  We have also been very careful to ensure that no family member of any Board Member is an employee of the partnership or receives any type of compensation.

 
The Commission formally adopts Advisory Opinion No. 96-117-E in response to this request and by attachment incorporates it into this opinion.

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

ISSUE 1:  As set forth in the attached opinion, a public/private entity, such as the non-profit economic development joint venture partnership, is considered a quasi-governmental entity when its purpose is public in nature. Therefore, the public officials serving on such a quasi-governmental entity’s board, when their respective governmental entities are funding or otherwise supporting it, does not as such violate the conflict of interest laws.

This finding is based on any contractual interests, if any, being public in nature rather than private.  The conflict of interest laws are applicable to competing private interests, not the competing interest of governmental entities.

Based on information supplied by the requestor, the non-profit economic development joint venture partnership is a quasi-governmental entity as its purpose is public in nature.  Therefore, the members of the city visitors and conventions council and the county economic development authority serving on the non-profit partnership board are not in violation of the conflict of interest laws.  This is true even though their governmental entities fund or support the non-profit partnership.  However, the public officials would violate certain or all of the above cited conflict of interest laws should they receive compensation as board members of or personal pecuniary benefits from the non-profit economic development joint venture partnership. [Emphasis added to bold text]

Notwithstanding the above, a public servant serving in two positions as set forth above must be keenly aware of the above cited Code Section 25-4-101.

Code Section 25-4-101 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 governmental entity’s board member should recuse himself or herself from any action that comes before his or her board that concerns a request of a quasi-governmental board he or she also serves.  The governmental entity’s board member’s failure to recuse himself or herself from the questioned matter certainly would create suspicion among the public and reflect unfavorably  upon the governmental entity.

A total and complete recusal requires that the public servant not only avoid debating, discussing or taking action on the questioned subject matter during the official meeting, but also avoid discussing the questioned 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 themselves 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.

ISSUE 2:  Constitutional Section 109 and Code Section 25-4-105(2), both cited above, prohibit public officials and public servants, respectively, from having private or personal interests, direct or indirect, in any contracts authorized by their governmental entities.  Such contracts would include contracts between the city visitors and conventions council or the county development authority and the non-profit economic development joint venture partnership.

As stated above, the members of the city visitors and conventions council and the county development authority would not violate Constitutional Section 109 and Code Section 25-4-105(2), should their respective public entities contract with the non-profit economic development joint venture partnership as the contracts would involve competing public interests and not competing private interests.  This finding being true as long as the public members on the non-profit partnership board are not compensated for such service. [Emphasis added to bold text]

Therefore based on the existing facts provided by the requestor, the county economic development authority contracting with the non-profit economic development joint venture partnership to provide marketing and management services is not prohibited by Constitutional Section 109 and Code Section 25-4-105(2).

However, the non-profit partnership board members, who are also county economic development board members, would be prohibited by Constitutional Section 109 and Code Section 25-4-105(2) from having any private pecuniary interest in the contract between the two governmental entities.
 

Additionally, Code Section 25-4-105(5), cited above, prohibits a public servant from using or disclosing non-public information gained through his public position that could result in a pecuniary benefit to himself, any relative or any other person, if the information has not been communicated to the public or is not public information.  Person means any individual, firm, business, corporation, association, partnership, union or other legal entity, and where appropriate, a governmental entity.

Therefore, public board members serving on multiple governmental or quasi-governmental boards would be in violation of Code Section 25-4-105(5) should they use non-public information gained by way of their position as board members that could provide a pecuniary benefit not only to themselves, but also, the governmental or quasi-governmental entities they serve.
 
 
 

Scott Rankin
Executive Director