This Advisory Opinion concerns the following issues 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.
 

ISSUE 1. May a business that is owned by or is an employer of a Workforce Board member be selected by the Workforce Board as a training provider and be paid by the Workforce Board’s “one stop” provider as a training provider with funds provided by the Workforce Board through its agreement with the “one stop” provider?

ISSUE 2. May a not-for-profit organization that has as one of its directors or that is an employer of a Workforce Board member be selected by the Workforce Board as a training provider and be paid by the Workforce Board’s “one stop” provider as a training provider with funds provided by the Workforce Board through its agreement with the “one stop” provider?

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(c), (d), (e), (f)(i)(ii), (g)(v), (h), (o) 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’ 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.

(o) ‘Public funds’ means money belonging to the government.

(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(2) states:
 

“(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.”

Code Section 25-4-113 states:
 
 

“The attorney general of the state of Mississippi or any governmental entity directly injured by a violation of this act may bring a separate civil action against the public servant or other person or business violating the provisions of this article for recovery of damages suffered as a result of such violation.  Further, any pecuniary benefit received by or given by a public servant in violation of this article shall be declared forfeited by a circuit court of competent jurisdiction for the benefit of the governmental entity injured.  In the discretion of the court, any judgment for damages or forfeiture of pecuniary benefit may include costs of court and reasonable attorney’s fees.”

Code Section 25-4-115 states:
 

“This article shall not bar, suspend or otherwise restrict any right or liability to damage, penalty, forfeiture, restitution or other remedy authorized by law to be recovered or enforced in a civil action, regardless of whether the conduct involved in the proceeding constituted an offense covered by this article.”

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

This office represents the Workforce Board.  In previous opinions, you have determined that the Workforce Board is a governmental instrumentality and that its members are public servants for purposes of the Ethics in Government Law including Code Section 25-4-105(2). (Official Advisory Opinion No. 03-065-E). I would appreciate your addressing two questions that have arisen as to the Workforce boards in the state.

As part of its duties, the Workforce Board approves certain entities to become eligible training providers.  The Workforce Board has an eligible training provider certification policy which guides the Board in its approval of those providers. Those approved providers give training to unemployed or underemployed persons through agreements with the MS Department of Employment Security. The MDES has an agreement with the Workforce Board to act as the Board’s “One Stop” provider.  The Workforce Board awards funds to the MDEC for acting as the One Stop provider and those funds are, in turn, paid to the training providers.

Do the state ethics laws prohibit the Workforce Board from approving as an eligible training provider a business that is owned by or is an employer of a Workforce Board member?

29 USC §2832 establishes the local Workforce Board and provides for its membership.  29 USC §2832 (B)(2)(a) provides that the composition of the Workforce Board shall, among others, include representatives of community-based organizations and representatives of each of the One Stop Partners.  As part of its duties, the Workforce Board approves certain entities to become service providers for summer youth programs and similar programs.  The Workforce Board has a policy which guides the Board in its approval of those providers.  The Workforce Board awards funds directly to those providers for providing the summer youth programs. Many times the community based organizations that are required members of the Workforce Board are the best or only providers of summer youth programs and the programs for which the Workforce Board must provide.

Do the state ethics laws prohibit the Workforce Board from approving as a provider of services such as the summer youth program an entity which is of the type whose membership is required on the Board?

The Commission formally adopts Advisory Opinion No. 03-065-E in response to this request and by attachment incorporates it into this opinion.

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

As set forth in the attached advisory opinion, a Workforce Board is a governmental instrumentality and its members are public servants for purposes of the Ethics in Government law, including Code Section 25-4-105(2), cited above.

Therefore, a Workforce Board member who is the owner or employee of a business that is selected by the Workforce Board as a training provider and/or is paid with Workforce Board funds as a training provider through the Workforce Board’s agreement with its “one stop” provider would be deemed by this Commission to be in violation of Code Section 25-4-105(2) of the Ethics in Government law if the selection, agreement and/or funding was authorized by the Workforce Board during his or her term or within one year thereafter. This prohibition will apply even when the business approved as a service provider is a type whose membership is required on the Workforce Board.

Also, it is this Commission’s understanding that the requestor’s reference to “representatives of community-based organizations and representatives of each of the One Stop Partners” means not-for-profit organizations. As set forth in the above cited Code Section 25-4-103(c), a “business” for purposes of the Ethics in Government law includes a “nonprofit corporation or other such entity, association or organization receiving public funds.”  In addition, it is this Commission’s long held position that a board of directors’ member of a not-for-profit organization who also serves as a governmental board member will have a prohibited interest in any contract authorized by the governmental board that benefits the not-for-profit organization. The prohibited interest arises from his or her fiduciary obligations to the not-for-profit organization as its board of directors’ member.

Therefore, a Workforce Board member who is on the board of directors or is an employee of a not-for-profit organization that is selected by the Workforce Board as a training provider and/or is paid with Workforce Board funds as a training provider through the Workforce Board’s agreement with its “one stop” provider would be deemed by this Commission to be in violation of Code Section 25-4-105(2) of the Ethics in Government law if the selection, agreement and/or funding was authorized by the Workforce Board during his or her term or within one year thereafter. This prohibition will apply even when the not-for-profit organization approved as a service provider is a type whose membership is required on the Workforce Board.

The requestor is cautioned to advise the Workforce Board members that a recusal or an abstention will not prevent a violation of Code Section 25-4-105(2) as neither action would remove the prohibited interest in a contract authorized by the Workforce Board.

As to liability accruing to a Workforce Board member and/or a business and/or other entity, the requestor is referred to the above cited Code Section 25-4-113 and Code Section 25-4-115.   Code Section 25-4-113 provides that the State Attorney General may bring a separate civil action against a public servant or any other person or business for violating the provisions of Article 3 of the Ethics in Government law for recovery of damages suffered.  Code Section 25-4-115 provides that a civil action brought under Article 3 does not bar, suspend or otherwise restrict any right or liability to damage, penalty, forfeiture, restitution or other remedy authorized by law to be recovered or enforced in a civil action, regardless of whether the conduct involved in the proceeding constituted an offense covered by Article 3.

Certainly, a contract authorized by a Workforce Board that  results in a violation of the Ethics in Government law is subject to investigation by this Commission and to being declared void by a court of competent jurisdiction.

The Commission’s authority to issue advisory opinions is restricted to interpreting and issuing opinions on the state conflict of interest laws.  Therefore, the Commission has no authority and may not issue an opinion regarding whether a federal law, such as 29 USC §2832, preempts Mississippi law. However, the requestor is advised that this Commission is duty bound to enforce the Ethics in Government law in regard to Workforce Board members, as with other public officers and public servants, unless a court of competent jurisdiction rules otherwise.
 
 
 

Scott Rankin
Executive Director