This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on October 1, 2004, basing its approval solely on the facts and circumstances stated herein.

 
May a board of aldermen contract with the child of an alderman when the parent and child are totally financially independent?

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, municipality, 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 25-4-103(c), (d), (f)(i)(ii), (g)(ii), (h), (l), (p)(i) and (q) 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:

(ii) Municipalities.

(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.

(q) ‘Relative’ means the spouse, child or parent.”

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, municipality 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.
 

I am an alderman for a municipality in Mississippi. We are considering hiring my son, a C.P.A., to perform compilation of our books and/or bookkeeping services. We are financially independent, and I need to know if there will be a problem if he is contracted with me, his parent, being an alderman.

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

Section 109, Miss. Const. of 1890, and Section 25-4-105(2), Miss. Code of 1972, both quoted above, prohibit an alderman from having any interest, direct or indirect, in any contract authorized by the board of aldermen during the alderman’s term or for one year thereafter. Thus, an alderman is prohibited from having an interest in his or her child’s contract with the municipality.
 
To avoid such an interest, the alderman and child must be totally and completely financially independent from each other. A parent and child are not financially independent if the child lives in the parent’s home, if the child leases or rents property from the parent, if the child is a debtor of the parent, if the child lives on property owned by the parent, or if the child owns a business with the parent.  These are only a few of many examples which could give a parent an interest in his or her child’s employment contract.

It is important to note that neither a recusal nor an abstention can prevent a violation of Section 109 and Section 25-4-105(2).  Even without the alderman’s vote, an authorization by the alderman’s board of a contract in which the alderman has a prohibited interest, nonetheless, results in a violation for which the alderman would be liable.

However, the municipality may contract with the child of an alderman when the parent and child are totally financially independent. Even so, that alderman may not participate in the contracting process. Section 25-4-105(1), Miss. Code of 1972, quoted above, prohibits an alderman from using his or her position to obtain a pecuniary benefit for a relative or a business with which he or she is associated.  A relative, as defined in Section 25-4-103(q), Miss. Code of 1972, quoted above, is a “spouse, child or parent” of the alderman. A business with which he is associated, as defined in Section 25-4-103(d), Miss. Code of 1972, quoted above, is “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.”

Therefore, the alderman may not be involved in any way in the board’s decision to employ his or her child, or the child’s business, even if the alderman would have absolutely no interest in the contract. The alderman will also be prohibited from participating in any decisions concerning pay raises or benefit increases affecting his or her child. This prohibition includes so called across-the-board measures affecting all municipal employees equally. The alderman must totally and completely recuse himself or herself from all such matters.

A total and complete recusal requires that the public servant not only avoid debating, discussing or taking action on the subject matter during official meetings or deliberations, but also avoid discussing the subject matter with staff or any other person. This includes casual comments, as well as detailed discussions, made in person, by telephone or by any other means. An abstention is considered a vote with the majority and is not a recusal. Furthermore, the minutes of the meeting should state the recusing member left the room before the matter came before the public body and did not return until after the vote.

The Nepotism Law is outside the jurisdiction of the Commission. Legal opinions on the Nepotism Law are issued by the Attorney General.
 
 

Scott Rankin
Executive Director