This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on August 8, 2003, basing its approval solely on the facts and circumstances stated herein.

 
May a mayor appoint a senior executive of a casino to a regional airport authority when the casino provides an $800,000.00 annual subsidy to an airline that pays rent and landing fees by way of contracts with the airport authority?

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)(i)(ii)(v), (h), (o) 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.

(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) ‘Government’ 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.

(o) ‘Public funds’ means money belonging to the government.

(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.
 

As City Attorney, I have been asked by the Mayor to obtain an Official Advisory Opinion from your office.  The facts giving rise to this request are:

The Regional Airport Authority (hereinafter Authority) is chartered pursuant to Section 61-3-1 et seq. of the Mississippi Code.  It holds a Certificate of Incorporation issued by the Secretary of State of Mississippi and is authorized to operate as an airport in the State of Mississippi. The Authority, which operates the Regional Airport (hereinafter Airport), is a joint venture of the certain cities and the county.

 
In addition to local support (including, but not limited to, direct funding from the City and the issuance of general obligation bonds), the Authority receives funding through such agencies as the Federal Aviation Administration (the Federal Airport Improvement Program), the Mississippi Department of Transportation (Aeronautics Grants), and the Mississippi Business Finance Corporation, a division of the State of Mississippi’s Department of Economic and Community Development (the Mississippi Airport Revitalization Revolving Loan Program).

It is my understanding that the Airport has been designated an “impact airport” due in large part to the substantial increase in total commercial airline passengers since the advent of gaming and the associated hotel room development.  Airlines operating at the Airport pay rent and landing and other fees to the Authority.  Due to the increase in airline flights and passenger traffic at the airport, the Authority continues to find it necessary to fund capital improvements.

One Airline Company operating at the Airport had been added to consume much of the available gate capacity constructed a few years ago.  It is my understanding that the Airline receives an annual subsidy from one of the local casinos (which has a hotel as part of its business) in the approximate amount of $800,000.00.

The term of the City’s appointment to the Authority is about to expire, and the Mayor is considering filling that position with a senior executive of the casino which provides the funding to the Airline.  Based on the above, please advise whether the proposed appointment is permitted under the State’s conflict of interest laws and all other applicable provisions and regulations.

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

Constitutional Section 109 and Code Section 25-4-105(2), both cited above, prohibit a member of a public body, including a member of a regional airport authority, from having an interest, direct or indirect, in any contract authorized by the public body 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 four elements for applying the prohibition imposed by Constitutional Section 109, and thereby Code Section 25-4-105(2).  The four elements are:
 

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?

It is the Commission’s finding that the senior executive officer has an indirect interest in the airline’s contracts with the regional airport authority by way of his obligations to the casino as its senior executive and the casino’s direct interest in the airline’s continued operation evidenced by its payment of the $800,000.00 annual supplement.

Therefore, Constitutional Section 109 and Code Section 25-4-105(2) will prohibit the regional airport authority’s board from entering into any contracts with the airline if the casino’s senior executive is appointed to the regional airport authority’s board.  This prohibition will apply during the senior executive’s term and for one year thereafter.

The requestor is cautioned to advise both the mayor and the casino’s senior executive 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.

In addition, the State’s public policy mandate set forth in Code Section 25-4-101, cited above, is a sufficient reason, in this Commission’s opinion, for a mayor to avoid appointing an individual to a regional airport authority board when the individual is a senior executive of a business that is financially interested in the operation of an airline that pays rent and landing fees to the regional airport authority by way of contracts with the regional airport authority.

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.” [Emphasis added to bold text]

 
Clearly, the mayor’s appointment of the casino’s senior executive to the regional airport authority’s board under the factual circumstance set forth by the requestor, can be expected to create suspicion among the public and reflect unfavorably upon the city and the regional airport authority as there will be a question of a division of loyalty on the part of the senior executive. A public servant should never place himself or herself, or be placed by his or her governmental entity, in a situation where a private interest is competing or appears to be competing with his or her public interest.
 
 

Scott Rankin
Executive Director