This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on September 5, 2003, basing its approval solely on the facts and circumstances stated herein.
 

May a division director of a state department with regulatory authority over an industry serve on the board of directors of a nonprofit corporation which has as its purpose attempting to save lives and prevent accidents related to the regulated industry and which is funded by businesses within the regulated industry?

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), (e), (g)(v), (h), (l), (m), (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.

(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.

(e) ‘Compensation’ mean money or thing of value received, or to be received, from any person for services rendered.

(g) ‘Government’ 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.

(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.

(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(1) and (5) 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.

(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.
 

Please consider this as a request for an official Ethics Commission opinion.  I am currently serving as a division director [with regulation authority over an industry] with a department of the state.  I have been asked to serve on the Board of Directors of a nonprofit corporation which has the purpose of attempting to save lives and prevent accidents [related to the regulated industry].  The department currently participates in the undertaking but provides no funds to the nonprofit corporation.  I will not receive any compensation or expense reimbursement from the nonprofit corporation which is solely funded by various related businesses [within the regulated industry].  Other states’ directors currently serve or have served in the past on the board of the nonprofit corporation in their respective states.
 
My specific question is would it be a conflict of interest or a violation of any ethics statutes for me to continue in my present position with the State of Mississippi and concurrently serve on the Board of Directors of the nonprofit corporation?

The Commission formally adopts Advisory Opinion No. 00-007-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.

This opinion is written with the understanding that the nonprofit corporation does not and will not receive any public funds from the State and specifically from the requestor’s employing state department.  If the nonprofit corporation receives any public funding from the State in the future, this advisory opinion is no longer applicable and the requestor should seek a new advisory opinion from the Commission setting forth the type, amount and authority of the public funds received by the nonprofit corporation.

It is not as such a violation of the state conflict of interest laws for the requestor to serve as a member of the board of directors of the nonprofit corporation without compensation.

Notwithstanding the above, the requestor is cautioned to remain keenly aware of the conflict of interest laws discussed below should the requestor accept an appointment to the board of directors of the nonprofit corporation.

Code Section 25-4-105(1), cited above, prohibits the requestor, as a public servant, from using his official position with the state to obtain a pecuniary benefit for himself, other than his compensation provided for by law. Code Section 25-4-103(l), cited above, defines pecuniary benefit as a benefit in the form of money, property, commercial interests or anything else the primary significance of which is economic gain.
 
Therefore, if the requestor receives any compensation or other pecuniary benefit from the nonprofit organization, then it is the Commission’s finding that the requestor will violate Code Section 25-4-105(1).  This finding is based on the Commission’s understanding that the requestor’s opportunity to serve on the board of directors of the nonprofit corporation results from his position as the state department’s division director.

 
Code Section 25-4-105(5), cited above, prohibits the requestor, as a public servant, from intentionally using or disclosing information gained in the course of or by reason of the requestor’s  employment with the state department 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.  The nonprofit corporation would be considered a person as that term is defined in the above cited Code Section 25-4-103(m).

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.

Clearly, the requestor serving as a member of the board of directors of the nonprofit corporation that is funded by the industry businesses regulated by the requestor’s division and state department has the potential to create suspicion among the public and reflect unfavorably upon the state agency.  To alleviate this appearance of impropriety, the requestor’s service on the board of directors of the nonprofit corporation should be based on the state department’s position on what is in the best interest of the public. To carry-out this public interest as the nonprofit corporation’s director, the requestor must seek the guidance and counsel of the state department as the corporation’s director.

The Commission advised the requestor that his service on the board of directors of the nonprofit corporation’s board must be approved by the state department as it must comply with the state department’s internal policies and procedures.
 
 

Scott Rankin
Executive Director