This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on July 22, 2005, basing its approval solely on the facts and circumstances stated herein.
 

May a city employee be a participant in a HOME Grant awarded to the city if the city employee meets the low to moderate income qualifications?

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(f)(i)(ii), (g)(ii), (h), (l), (o) and (p)(i)(ii)(iii) states:
 

“(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.

(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(1), (2), (3)(a) and (c) 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, 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.

(c) Be a purchaser, direct or indirect, of any claim, certificate, warrant or other security issued by or to be paid out of the treasury of the governmental entity of which he is an officer or employee.”

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

Request an Advisory Opinion based on the following question:  May an individual employed by the City apply to be the recipient in a Home Grant awarded to the City.

Applicants are awarded/chosen based on their credit strength and ability to pay the determined house note.  Applicants must be in low to moderate income category.

The Commission formally adopts Advisory Opinion No. 04-120-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.

Code Section 25-4-105(3)(a), cited above, prohibits a public servant, including a city employee, from being a contractor, subcontractor or vendor with his governmental entity, in this instance, the city.

The city employees would not be subcontractors or vendors in this instance. Therefore, the sole issue to be determined is whether the HOME Grant renovation agreements will result in the participating city employees being contractors with the city as anticipated in Code Section 25-4-105(3)(a).

The Ethics in Government statute defines “contract” at Code Section 25-4-103(f), cited above, but does not specifically define contractor.

The Mississippi Supreme Court in Moore Ex Rel. City of Aberdeen v. Byars, 757 So. 2d 243 (Miss. 2000), used the strict sense of the term contractor as it related to Code Section 25-4-105(3)(a) as “one who contracts to perform a service for another and not in the broad sense of one who is a party to a contract.”

In the specific facts stated above, the city employees will be receiving funding assistance through the HOME Grant administered by the city. Therefore in a strict sense, it is the city that is providing the service. The city employees are not required to perform any services for the city to participate in the grant program. The only requirements necessary for the city employees to receive the funds are that they must meet qualifications set forth by in the HOME Grant and related laws.  Under these specific circumstances, the city employees would meet the criteria as one who is a party to a contract with the city. However, the city employees would not be contractors with the city based on the Byars decision. Therefore, based on the specific facts presented, city employees participating in the HOME Grant described by the requestor would not violate Code Section 25-4-105(3)(a) by receiving the renovation/reconstruction assistance administered by the city.

  In addition, Code Section 25-4-105(3)(c), cited above, prohibits a public servant from being a purchaser, direct or indirect, of any claim, certificate, warrant or other security issued by or to be paid out of the treasury of the governmental entity of which he is an officer or employee.  The specific facts above clearly show the city employees will receive the funding assistance based on qualifying for the HOME Grant and would not be purchasers of any claim, certificate, warrant or other security issued by the city.

Notwithstanding the above, city employees must be made aware of Code Section 25-4-105(1), both cited above.

 
Code Section 25-4-105(1) prohibits public servants, including city employees, from using their official positions to obtain a pecuniary benefit for themselves, a relative or a business with which they are associated.

To avoid using their official positions to obtain a pecuniary benefit, the public servants must totally and completely recuse themselves from subject matters providing the pecuniary interests.  In this instance, the city public servants receiving the HOME Grant assistance must recuse themselves from all matters related to the program included but not limited to reviewing and/or approving applications, qualifications, disbursements, administration and accounting. [Emphasis added to bold text]

A total and complete recusal requires that the public servant avoid discussing the subject matter with board members, staff or any other person related to the matter.  This includes casual comments, as well as detailed discussions, made in person, by telephone or by any other means.

As set forth in the attached advisory opinion, Constitutional Section 109 and Code Section 25-4-105(2), both cited above, will absolutely prohibit the mayor or an alderman from participating in the HOME Grant described by the requestor.
 

Scott Rankin
Executive Director