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 4, 2004, basing its approval solely on the facts and circumstances stated herein.
 

May a legislator lease a building to an ambulance service which does not receive any state funding when the owner of the ambulance service has an interest in another business which has received loans and grants funded by legislative appropriations?

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)(iii)(iv)(v), (h), (l)  and (p)(i)(ii)(iii) state:
 

“(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;

(iii) All school districts;

(iv) All courts; 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.”

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.
 

There is an ambulance company in the County who has approached me, a legislator, about leasing a building that I own.  The owner of the ambulance company has an interest in a business which has received loans and grants from the State of Mississippi which I voted for.  In your opinion, will it be a conflict of interest for me to lease to this company?

In addition to the above facts, the requestor advised the Commission’s staff that the ambulance service and the other business are totally and completely separate enterprises and the ambulance service does not receive financial assistance of any kind from the other business.

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 governmental body, such as a legislator, from having an interest, direct or indirect, in any contract authorized by the governmental body of which he is a member 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 following four elements necessary to apply the Constitutional Section 109 prohibition, and thereby the Code Section 25-4-105(2) prohibition:
 

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?¹

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?

This Commission is ever mindful that Constitutional Section 109, and thereby, Code Section 25-4-105(2), serve the policy of protecting the public interest by “preventing graft of every possible sort, and secure[ing] the honest and clean administration of [governmental] affairs.”²

However, this Commission is also aware that the Mississippi Supreme Court has directed that Constitutional Section 109, and thereby Code Section 25-4-105(2), must not be interpreted too expansively, without regard to common sense, considering modern, current circumstances and conditions. The Court has said it will not require that which is “thoroughly impracticable.”³

The fact that the ambulance service and the second business are separate enterprises, albeit with some common ownership, raises the question of whether the requestor will have an interest prohibited by Constitutional Section 109 and Code Section 25-4-105(2) in the state loans and grants received by the second business as a result of his leasing his building to the ambulance service.

In this particular instance, it is our finding that the requestor’s interest, if any, in the second business’s state loans and grants by way of his leasing a building to the ambulance service is far outside the “edge of the target” necessary for violating Constitutional Section 109 and Code Section 25-4-105(2).⁴

The above finding is based on the understanding that the ambulance service will not receive funding appropriated by the Legislature and will not benefit, directly or indirectly, from the state loan and grant funds received by the second business. If either of these circumstances occur, then it is this Commission’s position that the requestor, as a member of the Legislature, will be in violation of Constitutional Section 109 and Code Section 25-4-105(2) should the funding be approved by the Legislature during the requestor’s term or within one year thereafter.

A legislator’s absence or nonparticipation in the approval and passage of an appropriation bill will not prevent either violation of Constitutional Section 109 and Code Section 25-4-105(2). Even without a legislator’s vote or participation, approval and passage of such an appropriation or other authorization by the Legislature during the legislator’s term or for one year thereafter, nonetheless, will result in a contract in which a legislator has a prohibited interest.

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.

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.”

Clearly, the ambulance service having some common ownership with the second business, has the potential of creating suspicion among the public and reflecting unfavorably upon the Legislature, if the requestor as a legislator knowingly is involved in any way, directly or indirectly, in the Legislature’s funding of the second business’s loans and grants.

In other words, the requestor as a legislator and public servant must never place himself, or be placed by his governmental entity, in a situation where a private interest is competing or appears to be competing with his public interest.

Therefore, the Commission strongly advises the requestor to take the following course of action so as to fully and completely comply with the public policy mandate set forth in Code Section 25-4-101.  First, the requestor should totally and completely recuse himself from any decisions or actions by the Legislature pertaining to funding he knows will benefit, or should reasonably expect to benefit, the second business. Second, the requestor should totally and completely recuse himself from discussions with any state agency concerning the second business’s loans and grants.

A total and complete recusal requires that the legislator not only avoid debating, discussing or taking action on such matters in the Capitol, but also avoid discussing the subject matter with other legislators, staff or any other person. Included in this prohibition are 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 legislator must leave the room or chamber where such discussions, considerations and/or actions take place.  Legislative records should show the member absent for that matter. An abstention or vote of “present” is a vote with the majority and therefore does not qualify as a recusal.
 

Scott Rankin
Executive Director
 

¹ An appropriation bill funding projects that allow payments under contracts in which legislators are interested are ‘laws authorizing the contracts’.  See Frazier v. State ex rel. Pittman, 504 So. 2d 675 (1987) and Cassibry v. State, 404 So. 2d 1360 (1981).

² Noxubee County Hardware Co. v. City of Macon, 90 Miss. 636, 43 So. 304, 305 (1907).

³ Frazier, 504 So. 2d 675, 695.

⁴ Frazier, 504 So.2d 695 (citing Cassibry, 404 So.2d 1368).