This Advisory Opinion concerns the following issues as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on November 1, 2002, basing its approval solely on the facts and circumstances stated herein.
 

Issue 1:  May a member of the Legislature, or a legislator who sits on the Legislative Human Services Committee or Subcommittee, serve on the board of directors of a county human resource agency when the county human resource agency receives state and/or federal ‘pass through’ funds from a state agency appropriated by the Legislature?

Issue 2:  May a member of the Legislature serve on the board of directors of a community action agency or any other nonprofit or for profit organization that receives state and/or federal funds appropriated by the Legislature?

Your opinion request to the Office of the Attorney General dated September 24, 2002, was referred by that Office to the Mississippi Ethics Commission on September 27, 2002, as your request involves the above issue that concern the Mississippi conflict of interest laws.

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

“(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.

(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.

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

We are a state agency created by a grant of legislative authority found in the 1972 Mississippi Code Annotated, as amended.  My questions are these:

1. May a member of the Mississippi Legislature serve on the board of directors of a state agency when said agency receives state and/or federal ‘pass-through’ funds from a state agency?

2. May a member of the Mississippi Legislature who sits on the Legislature’s Committee (or subcommittee) serve on the board of directors of a community action agency, resource agency, or any other organization that receives state and/or federal funds from a state agency?

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

Issue 1: While the Commission restricts its opinions to the conflict of interest laws, previous  Attorney General opinions have stated human resource agency board members are part of the executive branch of government.   Clearly, a legislator serving in the legislative branch of government.  Therefore, a legislator holding both positions simultaneously could possibly be prohibited by the “separation of powers provisions,” Constitutional Sections 1 and 2 of the Mississippi Constitution of 1890.   Therefore, the requestor should seek and receive from the Attorney General’s Office an opinion as to possible separation of powers prohibitions prior to implementing the following advisory opinion from the Commission.

Issue 1 presented by the requestor 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.

The courts of this state have not specifically addressed the “Declaration of Public Policy,” set forth in Code Section 25-4-101, as prohibiting a specific situation.  However, the courts have addressed public policy issues in other areas where certain situations were prohibited.

The courts have said very clearly that the public policy of this state is “found in its constitution and statutes.”¹    In insurance cases involving indemnity clauses, the courts have said that contracts may be invalid because they violate public policy.²
 

In addition, the Mississippi Supreme Court has addressed certain instances where public servants are limited in their actions by public policy.   In Board of Trustees v. Mississippi Publishers Corp., 478 So. 2d 269 (Miss. 1985), the Court ruled that the Institution of Higher Learning (IHL), regardless of the reasons benefitting IHL, could not ignore the clearly established public policy set out in the Open Meetings Law.³   Also, the Court ruled in Friedhof v. City of Biloxi, 232 Miss. 20 (1957), that city council members may not vote on matters directly concerning their personal interests as it is against public policy.⁴

The state’s public policy of public service being a public trust is clearly expressed in Code Section 25-4-101.  The legislator’s service on the county human resource agency board must be balanced against this clear statutorily declared public policy of public trust.

The legislator’s public position with the state provides him the authority and responsibility to protect the public’s interest through the state Legislature’s public funds appropriation process.  The legislator’s alternative public role, as human resource agency board member, obligates and mandates him to promote the human resource agency above all else involving appropriating funds and making laws affecting all human resource agencies, including the one the legislator serves as a board member.  Once the human resource agency requests ‘pass through’ funds from a state agency, the legislator can not recuse himself from his responsibilities concerning all funds and laws relative to human resource agencies without impeding his public duty, conversely, the legislator’s failure to recuse himself creates concern among the public relative to potential favoritism of human resource agencies and, in particular, the human resource agency he serves as a board member.

Based on the above, the Commission opines that the state’s public policy of public service being a public trust prohibits a legislator from serving as a board member of a human resource agency.  This situation is greatly intensified if the legislator sits on the Legislative Human Services Committee or Subcommittee with more direct input into funding, oversight and regulation of the human resource agencies.

Therefore, the requestor is advised to not serve in both capacities, i.e. legislator and human resource agency board member, if the human resource agency receives public funds through a state agency appropriated by the Legislature, as to do so would be contrary to the public policy mandate set forth in Code Section 25-4-101.

Issue 2:  Constitutional Section 109 and Code Section 25-4-105(2), both cited above, prohibit a member of a governmental body, such as a legislator, from having an interest, direct or indirect, in any contract authorized by the governmental body of which he is a member during his term and for one year thereafter.

In Frazier v. State, 504 So. 2d 675, (Miss. 1987), the Mississippi Supreme Court set forth the following four elements necessary to apply the Constitutional Section 109 prohibition, and thereby the Code Section 25-4-105(2) prohibition:
 

1. Is there a governmental contract with the state, county, municipality or district?

2. Does the public officer have an interest, direct or indirect, in the contract?

3. Is the contract authorized by a law passed or order made by a board or public body
            of which the public officer is a member?

4. Was the authorizing law or order passed during the public officer’s term or within
            one year after the expiration (or termination) of such term?

Community action agencies are private, non-profit, non-governmental bodies that fall within the definition of a business in the above cited Code Section 25-4-103(c).  The Commission assumes ‘any other organization’ as stated in the requestor’s question would also qualify as a non-governmental business under the above referenced code section since the requestor’s question is general in nature.  The requestor should provide additional information if ‘any other organization’ in the requestor’s question is other than a non-governmental business as defined above and the Commission will issue an opinion based on those specific facts.

In addition, the State Supreme Court has ruled that the appropriation of funds is part of the contract authorization process.⁵

Therefore, the Legislature’s appropriation of ‘pass through’ funds would constitute authorization of a grant contract by way of the ‘pass through’ funds of which the community action agency/other organization would receive a portion. If the community action agency/other organization receives funds from the state, authorized by the Legislature, during a  legislator’s term or one year thereafter, elements 1 and 3, as cited above, are met.

Next regarding element 2, a legislator has a direct interest in any funds received by the community action agency/other organization as a member of it’s board of directors.  The legislator’s interest in the appropriated funds arises from his fiduciary duty to the human resource agency and any pecuniary benefit derived from being a board member of the community action agency/other organization.

The final element will be met when the appropriated funds are authorized by the Legislature during a legislator’s term or one year after the expiration of that term.

Therefore, Constitutional Section 109 and Code Section 25-4-105(2) will absolutely prohibit a legislator from serving on the board of a community action agency or any other organization receiving ‘pass through’ funds authorized by the legislature during the legislator’s term or for one year after the expiration of that term. [Emphasis added to bold text]
 

The requestor is cautioned to advise the legislator 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 legislator’s vote, the appropriation of funds by the legislature, nonetheless, results in a contract in which the legislator has a prohibited interest.

Code Section 25-4-101 applies similarly to Issue 2 as in Issue 1, therefore, the requestor is referred above for a restatement of the Commission’s concerns related to the Legislature’s “Declaration of Public Policy” which would prohibit a legislator from serving on the board of a community action agency or any other nonprofit or for profit organization receiving Legislatively appropriated funds.
 

Scott Rankin
Executive Director
 

¹ Lanier v. State, 635 So. 2d 813 (1994); Cappaert v. Junker, 413 So. 2d 378, 380 (Miss. 1982); and State ex rel Knox v. Hines Lbr. Co., 115 So. 598, 605 (1928).

² Heritage Cablevision v. New Albany Elec., 646 So. 2d 1305 (Miss. 1994).

³ Board of Trustees, supra, “Notwithstanding these arguments, this Court weighs the negative aspect proposed by the Board against the balance of the statutorily declared public policy of openness.”  “The public policy of openness has been clearly expressed by the legislature.  Public access to information is the overriding consideration in this Court decision-”

⁴ Friedhof, supra, “Public policy forbids that a City Councilman be arbiter of his own cause.”

⁵ An appropriation bill funding programs that allow payments under contracts in which legislators are interested are ‘laws authorizing the contracts’.  See Frazier v. State, 504 So. 2d 675 (1987) and Cassibry v. State, 404 So. 2d 1360 (1981).