This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on June 13, 2003, basing its approval solely on the facts and circumstances stated herein.
 

May a county-owned community hospital employ one of its board of trustees member’s sister as a physician?

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.
 

I represent the county hospital board of trustees.  The county hospital is a county  owned licensed community hospital in good standing, a subdivision of the State of Mississippi, operating under the State statutes, duly organized and validly existing pursuant to orders of the board of supervisors many years ago, filed for record in the County Board of Supervisors Minute Book.

During the last couple of months, the county hospital administrator entered into negotiations with a physician.  The physician is the sibling of a member of the county hospital board of trustees.  Negotiations took place which culminated in the employment of the physician for the county hospital.

The county hospital administrator advised the board of his agreement with the physician.  The Board voted to direct their attorney to draft a contract and present the same at the monthly board meeting.  At the meeting, the board of trustee member, prior to discussion beginning concerning the physician, the physician, left the room and did not re-enter the room until after all discussions were complete and the next item on the agenda had been called by the president.

 
At the direction of the county hospital, I have reviewed the various statutes which the legislature has provided as guidelines governing conflict of interest provisions.

1. Mississippi Code Annotated Section 25-1-53 Employment of Relatives Prohibited Exceptions.  While it is against the law to employ relatives I note a specific exception in the statute which states that “the provision herein contained shall not apply in the instance of the employment of physicians, nurses or medical technicians by governing boards of charity hospitals or other public hospitals.”  Therefore, I believe there to be no prohibited conduct pursuant to Mississippi Code Annotated Section 25-1-53.

2. Mississippi Code Annotated Section 25-4-105.
Section 25-4-105(1) states that no public servant shall use his official capacity to obtained pecuniary benefit for himself other than that compensation provided for by law, or to obtain pecuniary benefit for any relative or any business for which he is associated.

Section 25-4-105(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.  A review of Mississippi Code Annotated Section 25-4-103(q) does not include a sister.  Further, we have determined that the county hospital board of trustee member is in no way associated with the medical practice of the physician.

3. Article IV, Section 109 of the Mississippi Constitution: provides that 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 terms.  We have determined upon review that the physician is not financially dependent upon the physician’s sibling, the county hospital board of trustee member, nor is county hospital board of trustee member in any way involved in the physician’s business, which is the practice of medicine.  Both siblings are financially independent and neither is dependent upon the other.  Therefore, there does not appear to be a violation of Section 109 of the Mississippi Constitution.

 
I write to you seeking an official opinion of the Mississippi Ethics Commission as to whether or not there is a conflict for the county hospital board of trustee member  to continue serving on the county hospital board of trustees which employs the trustee member’s sibling by contract, which is approved by the county hospital board of trustees upon which the board member sits.

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

The requestor is advised that the state conflict of interest laws do not as such prohibit a county-owned community hospital from employing, as a physician, the sister of one of the members of its board of trustees.

Constitutional Section 109 and Code Section 25-4-105(2), cited above, do prohibit a community hospital trustee from having an interest, direct or indirect, in any contract, including an employment contract, authorized by the community hospital board on which he or she serves.

However, the community hospital trustee would have a prohibited interest in his sister’s employment contract with the community hospital only if the sister and the hospital trustee are financially dependent in such a way as to give him a prohibited interest in her employment contract with the community hospital.  There is no indication in the requestor’s letter that the hospital trustee and the sister are in any way financially dependent on each other as the sister is an adult with her own medical practice and the requestor has advised that the hospital trustee is in no way associated with her medical practice.

As a precaution, the requestor is advised that the question of whether the hospital trustee and the sister are financially dependent upon each other requires an evaluation of all the facts and circumstances. Certainly, the sister would be financially dependent on the hospital trustee should she live in his household or be receiving other financial assistance from him.

In addition, the following are some examples that could result in the hospital trustee having an interest, direct or indirect, in his sister’s employment contract with the community hospital. The sister leased or rented property from the hospital trustee; was a debtor of the hospital trustee; lived on property owned by the hospital trustee; or co-owned a business with the hospital trustee. The above examples should not be considered as a complete list of circumstances that could result in the hospital trustee having an interest, direct or indirect, in his sister’s employment contract with the community hospital.

If one of the above or a similar circumstance does exist between the hospital trustee and his sister, the requestor should immediately present theses new facts to the Commission as this advisory opinion will no longer be applicable.
 
 
Code Section 25-4-105(1), cited above, does prohibit a community hospital trustee from using his official position to obtain a pecuniary benefit to a relative or a business with which he is  associated.

The requestor correctly states in the request letter that a sister is not within the definition of relative for purposes of the state conflict of interest laws.  Code Section 25-4-103(q) defines relative for purposes of the conflict of interest laws as spouse, child or parent.

As previously mentioned, the requestor states in the request letter that the hospital trustee “is in no way associated with the medical practice of [the sister].”

Based on the above, Code Section 25-4-105(1) will not prohibit the sister’s employment with the community hospital as she is not a relative of the hospital trustee and he is not associated with her medical practice.

In addition, the hospital trustee’s leaving the room prior to any discussion beginning concerning his sister’s employment appears to comply with the Commission’s position on recusal.

A public servant can avoid a violation of Code Section 25-4-105(1) by totally and completely recusing himself or herself from a questioned matter.  In this circumstance, the questioned matter being the sister’s employment by the community hospital.

Specifically, 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.

The requestor is cautioned to advise the hospital trustee 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 board member’s vote, the authorization by the member’s board, nonetheless, results in a contract in which the board member has a prohibited interest.

 
Notwithstanding the above, 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 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.

Certainly, the community hospital board’s employment of one of its trustees’ sister has the potential of creating suspicion among the public and reflecting unfavorably upon the community hospital. For this reason, the Commission’s position is that the hospital trustee’s recusal from the discussion and the vote concerning his sister’s employment is the proper and appropriate action as it alleviates the potential of public suspicion and unfavorable reflection.

Although the language pointed out by the requestor in Code Section 25-1-53 exempting physicians from its prohibition appears to specifically apply to the requestor’s facts, the requestor is advised that the state nepotism law is an area of state law outside the jurisdiction of the Commission. Therefore, the requestor should contact the Office of the Attorney General to confirm how the state nepotism law set forth in Code Section 25-1-53 may affect the above issue.
 
 

Scott Rankin
Executive Director