This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on May 6, 2005, basing its approval solely on the facts and circumstances stated herein.
 

May a city employee accept employment with a private business that is a vendor with the city?

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), (g)(ii), (h), (i), (k)(ii), (l) and (p)(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.

(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.

(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:

(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:

(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 (3)(a)(e) 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.
 
(e) Perform any service for any compensation for any person or business after termination of his office or employment is relation to any case, decision, proceeding or application with respect to which he was directly concerned or in which he personally participated during the period of his service or employment.”

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

This is to advise you that I will be retiring with the City effective June 10, 2005.  Prior to my retirement and with approval of the City, I will be accepting part time employment with a Pipe & Supply Company.  During this time, I will receive no more than $4,200.00 paid to me before June 10, 2005 from the Pipe & Supply Company.  Based on the above facts, will I avoid a violation Section 25-4-105(3)(a)?  Please understand that I will not be calling on the City and will not be acting on behalf of the Pipe & Supply Company in regard to any contracts they have with the City during this dual employment time.

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

Code Section 25-4-105(3)(a), cited above, provides that a city employee may not have a material financial interest in a business that is a vendor with the city.  Code Section 25-4-103(k)(ii), cited above, provides that a material financial interest for an employee of a business that owns less than two percent of the business is an aggregate annual net income of at least $5,000.00.
 
The Commission interprets Code Section 25-4-103(k)(ii) to mean that a public servant must receive an aggregate annual net income of at least $5,000.00 while still in government service or employment for a Code Section 25-4-105(3)(a) violation to occur. Since the requestor’s income from the business will total only $4,200.00 while he is still in the employ of the city,  then his employment with the business prior to his retirement from the city will not violate Code Section 25-4-105(3)(a).
 
The requestor is advised of Code Section 25-4-105(3)(e), cited above, that prohibits a former employee of a city from being compensated by a business after leaving government employment when the former employee’s compensation from the business is for performing services related to any case, decision, proceeding or application with respect to which he was directly concerned or in which he personally participated during the period of his government employment.
 
Notwithstanding the above, the requestor is advised that his part-time employment with the business will result in it being a business with which he is associated as defined in the above cited Code Section 25-4-103(d). Therefore during the short period of time that the requestor will be simultaneously employed by the city and the business, Code Section 25-4-105(1), cited above, will prohibit the requestor from using his official position with the city as its general manager of the water and sewer operations and maintenance division to provide a pecuniary benefit to the business. The Commission advises the requestor to totally and completely avoid making any decisions or taking any actions in his general manager’s position related to the business during this period of dual employment.
 

Scott Rankin
Executive Director