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 25, 2005, basing its approval solely on the facts and circumstances stated herein.
 

May a state employee purchase a common interest in real property with an individual who owns a company which serves as a subcontractor to the state agency for which the state employee works when the state employee will receive no interest in or income from the company?

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(d), (g)(v), (h), (k)(i)(ii)(iii)(iv), (l) and (p)(i)(ii)(iii) states:
 

“(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.

(g) ‘Governmental’ 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.

(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);

(iii) The income as an employee of a relative if neither the public servant or relative is an officer, director or partner in the business and any ownership interest would not be deemed material pursuant to subparagraph (i) or (ii) herein; or

(iv) The income of the spouse of a public servant when such spouse is a contractor, subcontractor or vendor with the governmental entity that employs the public servant and the public servant exercises no control, direct or indirect, over the contract between the spouse and such governmental entity.

(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), (3)(a) and (5) 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.

(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.

(5) No person may intentionally use or disclose information gained in the course of or by reason of his official position or employment as a public servant in any way that could result in pecuniary benefit for himself, any relative, or any other person, if the information has not been communicated to the public or is not public information.”

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

I currently have an opportunity to purchase property in [my home] county with another individual. I am an employee with a state agency [which oversees certain construction projects]. The individual currently owns a construction company which subcontracts (trucking) with prime contractors [to my agency]. He deals with the prime contractor for payment. His subcontracts (trucking) with prime contractors represents a small portion of his total income. I do not have a financial interest in his company.

I need the Ethics Commission’s favorable opinion on the acceptability of this purchase.

If my decision making is a concern of the Commission, then I could ask my supervisor to remove me from any decisions concerning the Construction Company. We have other personnel in our office, who could make decisions concerning his company.

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

Public servants, like the requestor, may not use their official position to obtain pecuniary benefit for a “business with which [they are] associated”¹ and may not have a “material financial interest” in a business which is a contractor, subcontractor or vendor to the governmental entity for which they work,² in this case the state. The requestor has clearly stated he has no financial interest in the company which serves as a subcontractor to his agency and that the owner, not the company, would be his co-tenant in the proposed land purchase. The acquisition by the requestor and the individual in question of a common interest in real property should not give the requestor any interest in the company owned by the individual. Therefore, no violation of the Ethics in Government Laws will occur if the proposed land purchase is concluded as described herein.

Nevertheless, the requestor’s suggestion that he be removed from any decisions which might affect the company in question is well advised. Public servants should conduct themselves in a manner which enhances the public trust in government and avoid actions which may tend to create public suspicion regarding the honesty and integrity of those in government. See Section 25-4-101, Miss. Code of 1972, quoted above. Removing the requestor from decisions affecting the company should effectively ameliorate any potential suspicion among the public.

Additionally, removing himself from actions affecting the company should help the requestor avoid using his official position to obtain pecuniary benefit for himself, including but not limited to forgiveness of debt or favorable financing from his co-tenant or obtaining an interest in the property at below fair market value through any other efforts of his co-tenant. Any action taken by the requestor in his government job in exchange for such a pecuniary benefit would violate Section 25-4-105(1), Miss. Code of 1972.

The requestor should also be aware of the restrictions imposed under Section 25-4-105(5), Miss. Code of 1972, quoted above. The requestor may not disclose any non-public information he gains through his government employment to anyone, especially his co-tenant, if the disclosure could result in a monetary benefit to anyone.

Finally, the requestor should seek the approval of his state agency before entering the land purchase. Governmental entities may impose restrictions on their employees which are more restrictive, but not less restrictive, than the Ethics in Government Laws cited and discussed herein.

Scott Rankin
Executive Director
 

¹ Section 25-4-105(1) and Section 25-4-103(d), Miss. Code of 1972, quoted above.

² Section 25-4-105(3)(a) and Section 25-4-103(k), Miss. Code of 1972, quoted above.