This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on March 5, 2004, basing its approval solely on the facts and circumstances stated herein.
 

May a state employee operate a business that is licensed and regulated by the bureau of the state agency for which the state employee works?

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)(v), (h),  (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) ‘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.

(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) 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.”

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

As the Executive Head of a State Agency, I am requesting an official Ethics Commission Opinion pursuant to Miss. Code Ann. Section 25-4-1 et seq.

The State Agency is made up of a number of divisions including “the Bureau.”  The Bureau is a regulatory and service division of the State Agency and was established under a State Act to protect the certain interests of the state from harmful sources.  The Bureau administers state and federal laws, regulations and programs that deal with the public’s safety pertaining to this area of interests.

I have been advised that an “employee” of the Bureau whose official duties include, in part, the inspection of all certain potentially dangerous commercial programs, has indicated his intent to become a licensed operator and start his own business.  The job description for this employee includes:
 

This is administrative scientific work, supervising the activities of field personnel in a program of planned inspection and in the control or eradication of certain dangers.  Incumbents are responsible for planning, supervising and evaluating the work of the field personnel in inspection and in the control or eradication of certain dangers, directing various projects relative to related control; directing various inspection work to determine illegal practices; and other related work.  The work involves the supervision of office staff and field personnel who are responsible for enforcement of laws regulating the application of various dangerous products and other plan and control work.  Supervision is generally received from an administrative superior through the review of reports, conferences, and by results obtained.

Due to the regulatory responsibilities that encompass the job for which the employee was hired, would his employment with the regulatory authority and his status as a licensee of the regulatory authority present a conflict of interest?  As the Executive Head of the State Agency, I do not want to foster a situation that has the potential of creating suspicion among the public and reflecting unfavorably upon the State Agency and/or the Bureau.

Secondly, would this potential conflict of interest be alleviated by the employee’s transfer to another division with the Bureau?

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

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

If the scientific senior employee or his subordinates approve his license or inspect his operation relative to compliance with Bureau regulations, then that approval could be determined to result in a use of his official position that will provide him a pecuniary benefit in violation of Code Section 25-4-105(1). Also, the  scientific senior employee will be in violation of Code Section 25-4-105(1) should he use any of the State Agency’s equipment, facilities or other resources to conduct his business or should he conduct his business operation when he has not completed his required work hours or taken personal leave.

Code Section 25-4-101, as cited above, also must be considered in this issue.

Code Section 25-4-101 sets the tone for the conflict of interest laws by declaring that elective and public office and employment is a public trust.  The Legislature’s “Declaration of Public Policy,” in part, provides, “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.”

The courts of this state have not specifically addressed the “Declaration of Public Policy,” set forth in Code Section 25-4-101, as prohibiting a specific situation.  However, the courts have addressed public policy issues in other areas where certain situations were prohibited.

The courts have said very clearly that the public policy of this state is “found in its constitution and statutes.”¹   In insurance cases involving indemnity clauses, the courts have said that contracts may be invalid because they violate public policy.²

In addition, the Mississippi Supreme Court has addressed certain instances where public servants are limited in their actions by public policy.   In Board of Trustees v. Mississippi Publishers Corp., 478 So. 2d 269 (Miss. 1985), the Court ruled that the Institution of Higher Learning (IHL), regardless of the reasons benefitting IHL, could not ignore the clearly established public policy set out in the Open Meetings Law.³   Also, the Court ruled in Friedhof v. City of Biloxi, 232 Miss. 20 (1957), that city council members may not vote on matters directly concerning their personal interests as it is against public policy.⁴

The state’s public policy of public service being a public trust is clearly expressed in Code Section 25-4-101. The Bureau’s scientific senior employees being commercial operators that are regulated and subject to the authority of the Bureau must be balanced against this clear statutorily declared public policy of public trust.

The duties of the scientific senior employees with the Bureau give them the authority and responsibility to protect the public’s interest through the State Agency’s inspection, regulation and licencing of the commercial operators using these potentially dangerous products.

The scientific senior employees being commercial operators clearly can be expected to raise suspicion among the public and cause the State Agency and its Bureau to appear in an unfavorable light to the public. Among the reasons for these expectations are: 1) the scientific senior employees’ private pecuniary interests as commercial operators could be seen by the public as tainting their desire to see the Bureau’s regulations strongly enforced; 2) other commercial operators could begin to question the Bureau’s independent and fair enforcement of its regulations and licencing authority when its employees are also commercial operators; and 3) the State Agency and its Bureau, as a regulatory authority, must be certain its employees are always looking after the public’s interest when they are in the field and not their private interests.

The State Agency and its Bureau have been given the important public responsibility of protecting the public’s safety by regulating and licencing the operators this potentially dangerous commercial industry. Therefore, every effort should be made to assure the public that this responsibility is foremost to the State Agency and its Bureau.

Based on the above, our opinion is that the state’s public policy of public service being a public trust is a sufficient reason for the State Agency to forbid the Bureau’s scientific senior employees from being licensed by the Bureau as commercial operators which will thereafter be  regulated and subject to the authority of the Bureau.

In regard to the question of moving the subject employee to a different division within the Bureau, the State Agency and its Bureau will be diminishing its ability to carry out its responsibilities  by transferring its qualified employees to other departments solely for the reason of allowing its employees to pursue their private interests. Again, the State Agency and the Bureau are under a public trust obligation to make decisions that are in the best interest of the public. Therefore, it appears that such an action is equally contrary to the public policy mandate set forth in Code Section 25-4-101.

It should also be noted that nothing in this opinion would preclude the agency from implementing its own internal policies or administrative procedures consistent with this opinion. That authority is inherent in the agency and need not be authorized by this Commission.
 

Scott Rankin
Executive Director
 

¹ Lanier v. State, 635 So. 2d 813 (1994); Cappaert v. Junker, 413 So. 2d 378, 380 (Miss. 1982); and State ex rel Knox v. Hines Lbr. Co., 115 So. 598, 605 (1928).

² Heritage Cablevision v. New Albany Elec., 646 So. 2d 1305 (Miss. 1994).

³ Board of Trustees, supra, “Notwithstanding these arguments, this Court weighs the negative aspect proposed by the Board against the balance of the statutorily declared public policy of openness.”  “The public policy of openness has been clearly expressed by the legislature.  Public access to information is the overriding consideration in this Court decision-”

⁴  Friedhof, supra, “Public policy forbids that a City Councilman be arbiter of his own cause.”