This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on June 3, 2005, basing its approval solely on the facts and circumstances stated herein.
 

May a city contract with a company for cellular telephone service when one of the city’s aldermen has a spouse who has a material financial interest in the company by way of her employment with 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:

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 25-4-103(c), (d), (f)(i)(ii), (g)(ii), (h), (i), (k)(i)(ii)(iii)(iv), (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.

(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);

(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.

(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(2), (3)(a) and (4)(d) 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.

(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.

(4) Notwithstanding the provisions of subsection (3) of this section, a public servant or his relative:

(d) May be a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent: (i) where such goods or
services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws; or (ii) where the contractual relationship involves the further research, development, testing, promotion or merchandising of an intellectual property created by the public servant.”

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

May code charter municipality enter into a contract with a company to provide cellular phone service for the municipality if a spouse of a member of the Board of Aldermen is employed by that cellular phone company.

The spouse of a member of the Board of Aldermen is employed as an accounting clerk of the company. A copy of the job description is attached. The spouse had no contact with city personnel during the negotiation or proposal process. The member of the Board of

Aldermen did not participate during the evaluation process however, the Board must approve the contract.

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), quoted above, prohibits an alderman from having a material financial interest in a business which is a contractor or vendor with the city he serves. As set forth above in Code Section 25-4-103(k)(ii), a “material financial interest” would occur if the alderman and/or his spouse receives $5,000.00, or more, in aggregate annual net income from the cellular telephone company.

Therefore, Code Section 25-4-105(3)(a) will prohibit the cellular telephone company employing the alderman’s spouse from contracting with the city if the spouse’s income from the company is $5,000.00, or more, in aggregate annual net income.

The above cited Code Section 25-4-103(k)(iv) provision does not apply in this instance since the board of aldermen must approve the contract.

The requestor is also advised that none of the exceptions set forth in Code Section 25-4-105(4) are applicable in this instance. The exception in Code Section 25-4-105(4)(d), cited above, is the only one that could even apply under these facts and it obviously is not applicable since cellular telephone services are reasonably available from numerous commercial sources.

The Commission finds it unnecessary to consider whether Constitutional Section 109 or Code Section 25-4-105(2), both cited above, prohibit the contract in question since it is clearly prohibited by Code Section 25-4-105(3)(a).
 

Scott Rankin
Executive Director