This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on January 9, 2004, basing its approval solely on the facts and circumstances stated herein.
 

May a state employee provide training outside the state as an independent contractor of a nonprofit group and perform other professional services for the nonprofit group?

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 25-4-103(b), (c), (d), (e), (f)(i)(ii), (g)(v), (h), (k)(i)(ii), (l) and (p)(i)(ii)(iii) states:
 

“(b) “Benefit” means any gain or advantage to the beneficiary, including any gain or advantage to a third person pursuant to the desire or consent of the beneficiary.

(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.

(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:

(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.

(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).

(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.”

Code Section 25-4-105(1), (3)(a) 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.

(3) No public servant shall:

(a) Be a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent, other than in his contract of employment, or have a material financial interest in any business which is a contractor, subcontractor or vendor with the  governmental entity of which he is a member, officer, employee or agent.

(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.
 

Since accepting an appointment with a state agency over 17 years ago, I have acquired considerable expertise and standing in a certain management profession.  As the Deputy Director of the state agency, my career has brought me in contact with all other such management professionals from across the country.  I am often invited to speak at conferences and participate in training courses on various subjects on behalf of the state agency at local, state, regional and national seminars and conferences.  My participation in these endeavors is often provided on the state agency’s time and at the state agency’s expense.  Many times the state agency is reimbursed by other public and non-profit organizations for my travel expenses to these venues.

Recently, a non-profit group has offered me employment as an independent contractor to utilize my expertise and experience to provide training to multi-discipline audiences at locations outside the State of Mississippi.  I would also be expected to represent this organization on national work groups to develop course curriculum and other strategies to expand interstate mutual-aid on a national basis.  I would also perform consultant and other professional services as needed in this same capacity. The work I would perform as a private contractor would be accomplished on my own time and at my own expense.

Based on these facts, I would appreciate an Advisory Opinion from the Ethics Commission as to the following matter:

May I be employed as an independent contractor on my own time and at my own expense outside the State of Mississippi to provide emergency management training at conferences and seminars for a non-profit group as well as perform consultation  and other services as may be requested?

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

Code Section 25-4-105(1), cited above, prohibits a public servant, including a state employee, from using his official position to obtain a pecuniary benefit for himself or a business with which he is associated.

Code Section 25-4-103(c), cited above, defines a business as 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.

A state employee being a self-employed individual is a business with which the state employee is associated as defined in the above cited Code Section 25-4-103(d).

Therefore, the requestor, as a state employee, may not benefit from payments from a nonprofit corporation for training and other services if he uses his official position with the state agency to set-up, conduct and/or provide the training services or to perform the other services, as to do so would violate Code Section 25-4-105(1).

As did the circumstance in the attached advisory opinion, the requestor presents a unique circumstance as he obtained his basic knowledge in this particular area at some cost and at the direction of his state agency employer as he is required to have this knowledge in order to hold [or perform] his public employment position [or duties].

Clearly, the requestor, as a state employee, has primarily obtained his knowledge and training in the subject management field at the expense of the state agency as its compensated deputy director.
 
As in the circumstance addressed in the attached advisory opinion, there is, however, no evidence that the requestor has used his official position with the state agency to obtain the basic training and knowledge in the subject management field. The requestor’s use of his official position is a necessary element to violate Code Section 25-4-105(1). It is the Commission’s understanding, that there are no mandates in state law requiring the requestor as a state employee to obtain any particular training.  In fact, a decision as to whether a state employee will receive training in a particular area at the cost of his state agency employer is solely within the purview and authority of the state agency’s executive director or governing body.

Based solely on the specific facts presented herein, Code Section 25-4-105(1) will not prevent the requestor, as a state employee, from providing training and other consulting services to the nonprofit group outside of the State of Mississippi.  This is true even though the requestor in question obtained his basic training and knowledge through his position with his state agency employer as there is no evidence that the requestor used his position to obtain the training and knowledge for the reasons stated above.

The requestor is advised that he will be in violation of Code Section 25-4-105(1) should he use the state agency’s equipment, facilities or other resources to provide the training and other consulting services to the nonprofit group.  Specifically, the requestor may not use training materials and resources to provide private training services that were paid for by the state agency or which he acquired in training classes he attended at the direction of and as a paid employee of the state agency.  Also, the requestor will violate Code Section 25-4-105(1) should he provide the training services when he has not taken personal leave from his state employment position.

The requestor is also cautioned to remain keenly aware of the following provisions of the state conflict of interest laws discussed below.

Code Section 25-4-105(3)(a), cited above, prohibits a public servant from being a contractor, subcontractor or vendor with the governmental entity employing him or from having a material financial interest in a business that is a contractor, subcontractor or vendor with the governmental entity employing him.

Therefore, Code Section 25-4-105(3)(a) will prohibit the requestor from providing private training services to the state and especially his state agency employer. Also, if the requestor is receiving more than $5,000.00 aggregate net annual income from the nonprofit group, the nonprofit group will be prohibited from being a contractor, subcontractor or vendor with the state and especially the requestor’s state agency employer.

Code Section 25-4-105(5), cited above, prohibits a public servant from using or disclosing nonpublic information gained by reason of the public servant’s official employment that in any way could result in a pecuniary benefit to the public servant or any other person.  The definition of “person” set forth in Code Section 25-4-103(m), cited above, would include the nonprofit group contracting with the requestor as an independent contractor.

The requestor is advised, the conflict of interest laws do not overrule specific agency policies and procedures which might be more restrictive than the conflict of interest laws.  Therefore, the requestor should inquire of his agency to ensure there are no policies or procedures prohibiting his training other governmental entities outside of the boundaries of the State of Mississippi in the use and operation of a federal computer program and charging a fee for such service.

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.

As an executive officer of the state agency, i.e., deputy director, it is the Commission’s finding that the requestor providing training and/or other services on behalf of the nonprofit group in the subject management field within the boundaries of the State of Mississippi would raise a sufficient appearance of impropriety  to be contrary to the public policy mandate set forth in Code Section 25-4-101.  In short, the public and other governmental entities would not be certain if their involvement with the requestor was as a public servant or a privately paid consultant.  This raises a suspicion of  “divided loyalties” about which the public and other governmental entities should not have to be concerned.
 
 

Scott Rankin
Executive Director