This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on July 16, 2004, basing its approval solely on the facts and circumstances stated herein.
 

May an individual serve as a member of a coliseum commission when the person is the executive director of an industrial association that co-owns a large event that is held at the coliseum’s convention center annually?

Your opinion request to the Office of the Attorney General dated May 25, 2004, was referred by that Office to the Mississippi Ethics Commission on May 27, 2004, as your request involves the above issue that concern the Mississippi conflict of interest laws.

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), (d), (e), (f)(i)(ii), (g)(i)(v), (h), (i), (k)(i)(ii), (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.

(e) ‘Compensation’ means 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:

(i) Counties; 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.

(i) ‘Income’ means money or thing of value received, or to be received, from any source derived, including but not limited to, any salary, wage, advance, payment, dividend, interest, rent, forgiveness of debt, fee, royalty, commission or any combination thereof.

(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), (2) and (3)(a)(d) 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.

(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.

(d) Perform any service for any compensation during his term of office or employment by which he attempts to influence a decision of the authority of the governmental entity of which he is 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.
 

I am writing to request an opinion concerning an individual serving as a coliseum commissioner. This individual is the executive director of an industry trade association. This individual was previously appointed and served on the coliseum commission a few years ago.

This individual coordinates a large event held at the coliseum’s convention center.  It has been held annually since 1993 and this individual has been involved since day one.  This individual does not own any part of the event, however it is co-owned by the individual’s employer, the industry trade association, and another corporation.  Could this represent a conflict of interest, should the individual be appointed to this commission?

In addition to the facts set forth above, it is the Commission’s understanding that the event in question is though an agreement between the association and corporation and the coliseum which allows a temporary lease arrangement.  The agreement is identical to all other agreements signed by users of the convention center. These use agreements are set forth by established rules and regulations and are authorized by the executive director.  In short, the form of the agreements are all the same and not subject to negotiation.  If this understanding is incorrect, the requestor is instructed to inform the Commission immediately as the following opinion may no longer be applicable.

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

In answer to the requestor’s specific question, the appointment of the individual in question to the commission could result in a conflict of interest.  However, based on the understanding of the facts presented and set forth above, the individual’s appointment, in and of itself, is not absolutely prohibited by the state conflict of interest laws for the following reason.

Constitutional Section 109 and Code Section 25-4-105(2), cited above, prohibit a member of a governmental board, including a coliseum commissioner, from having an interest, direct or indirect, in any contract authorized by the board of which he or she is a member during his or her term or one year thereafter. [Emphasis added to bold text]

Also, Code Section 25-4-105(3)(a), cited above, prohibits a public servant, such as a coliseum commission member, from having a material financial interest in any business that is a contractor, subcontractor or vendor with the public servant’s governmental entity. [Emphasis added to bold text]

Subject to the above stated understanding of the facts and procedures of the coliseum commission, the Commission’s finding is that the user agreement in question is nothing more than a license to use the convention center, and not a contract for purposes Constitutional Section 109 and Code Section 25-4-105(2) or (3)(a).¹

Notwithstanding the above, there still remains the potential for a conflict of interest should the individual be appointed to the coliseum commission due to the annual event being held at the convention center even though there is not an absolute prohibition to the individual’s appointment due to the annual event. This potential for a conflict of interest arises from the prohibitions imposed by Code Section 25-4-105(1) and (3)(d), both cited above.

 Therefore, the requestor is cautioned to advise the individual that appointment to the coliseum commission will require a total and complete recusal by the individual on any matter coming before the commission concerning the trade association, especially the annual event. Without a total and complete recusal, the individual can expect to be in violation of both Code Section 25-4-105(1) and (3)(d). [Emphasis added to bold text]

 Code Section 25-4-105(1) prohibits a public servant from using his or her official position to obtain a pecuniary benefit for a business with which the public servant is associated.  The trade association is a business with which the public servant is associated as defined in the above cited Code Section 25-4-103(d).

 Code Section 25-4-105(3)(d) prohibits a public servant from performing any service for any compensation during his or her term of office or employment by which he attempts to influence a decision of the authority of the governmental entity of which he or she is a member. As the coordinator of the annual event, the individual is compensated to see that the annual event is successful including influencing any decision of the commission to that end.

An abstention is a vote with the majority of the governing entity’s board and therefore does not qualify as a recusal.

A total and complete recusal requires that the public servant not only avoid debating, discussing or taking action on the subject matter during the official meeting, but also avoid discussing the subject matter with other board members, staff or any other person prior to and after the official meeting.  This includes 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 public servant must leave the room or area where such discussions, considerations and/or actions take place. The minutes of the governing entity’s board should state the public servant left the meeting by showing him or her absent for that matter.

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.

 It is the Commission’s position that if the individual in question is appointed to the coliseum commission that she should also recuse from any matter coming before the commission concerning the trade association to comply with the public policy mandate set forth in Code Section 25-4-101.

Scott Rankin
Executive Director
 

¹ Quoting Jones v. Howell, 827 So. 2d at 700, “Equally important is the fact that the Medicaid program allows them no right to negotiate a contract that is any different from those entered into by every other member of their class, nor are they granted any exclusive privilege or contract to singly represent any state or other governmental agency. In fact, they cannot negotiate at all. Their alleged sin in this case was the execution of a form "Participation Agreement" authorizing them to directly receive Medicaid reimbursements. The form they signed was identical to the same forms executed by all other Mississippi pharmacists who would agree to service Medicaid clients. This form amounted to nothing more than a license to fill prescriptions for Medicaid clients.” [Emphasis added]
Referencing Black’s Law Dictionary, Fifth Edition, pg. 830: License - Real property -  “A privilege to go on premises for a certain purpose, but does not operate to confer on, or vest in, licensee any title, interest, or estate in such property. Timmons v. Cropper, 40 Del. Ch. 29, 172 A. 2d 757, 759. Such privilege is unassignable.”