This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on February14, 2003, basing its approval solely on the facts and circumstances stated herein.
 

May an alderman participate after a period of time in the selection of the city’s insurance policies from an insurance company that the alderman previously held an interest?

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:

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), (f)(i)(ii), (g)(ii), (h), (k)(i)(ii)(iii)(iv), (l) and (p)(i)(ii)(iii) 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.

(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.

(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);

(iii) The income as an employee of a relative if neither the public servant or relative is an officer, director or partner in the business and any ownership interest would not be deemed material pursuant to subparagraph (i) or (ii) herein; or

(iv) The income of the spouse of a public servant when such spouse is a contractor, subcontractor or vendor with the governmental entity that employs the public servant and the public servant exercises no control, direct or indirect, over the contract between the spouse and such governmental entity.

(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.”

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

The above opinion imposes certain restrictions on my participating in any insurance contracts between the Town while I serve as an Alderman and an Insurance Agency, Inc., formerly owned by me, along with a gag rule as to any discussions or comments.
 
My question is at what point in time can these restrictions, etc., cease so that I can again represent my constituents in these matters of town business.

I would assume that upon discussions of renewals of the current policies, which expire on December 1, 2003, I would be free to participate.

The Commission formally adopts Advisory Opinion No. 02-115-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.

In the attached Advisory Opinion No. 02-115-E, the Commission advised the requestor, as an alderman who previously had an interest in the insurance company, that he should totally and completely recuse himself from actions before his board related to the insurance company to fully and completely comply with the state’s public policy set forth in 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.
 
Specifically, Code Section 25-4-101, in part, 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.”

As stated in the previous opinion, the history of the requestor’s past interest in the insurance company was sufficient to result in a circumstance that would create suspicion among the public and reflect unfavorably upon the city if the requestor participated in the pending decision of the city board to contract with the insurance company.

 
There is no specific time limit applicable to Code Section 25-4-101 that would automatically allow the requestor to avoid the public policy issue when participating in a vote by his board related to the insurance company. Instead, circumstances within the community and the requestor’s perceived continued involvement with or interest in the insurance company would contribute to the public’s suspicion and the unfavorable reflection upon the requestor’s city and thus dictate the length of time the requestor should wait before participating in actions related to the insurance company.   Ultimately, the requestor must determine the adequate time period to recuse himself from the city board’s actions and/or votes related to the insurance company by  relying on assistance from the city’s legal counsel, other board members and feedback from the community. The recommended time period, from when the requestor has disposed of his interest in the insurance company and when he should no longer recuse himself from actions related to the insurance company, could range from several months to never participating in the insurance company matters before his board, all depending on specific local circumstances. However, it is obvious that any public policy concern can be expected to diminish the longer the time period between the date the requestor and his spouse divested themselves of their interests in the insurance company and the date of the city board’s action and/or vote related to the insurance company.
 
 

Scott Rankin
Executive Director