This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on October 7, 2005, basing its approval solely on the facts and circumstances stated herein.
 

May a board of aldermen choose an alderman’s landlord as its city attorney?

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), (l) 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.

(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.

(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) and (2) 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.”

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

I am writing this letter to your Commission in regards to what I perceive to be an ethical violation and would request an ethics opinion as to whether or not such did in fact violate the law.  I was sworn in as Alderman for the City on the 1st day of July, 2005.  The first meeting that our Board held was on Tuesday, July 5, 2005.

As required by the new Board we attended to the rehiring of the City employees.  When the matter came down to the issue of the City Attorney, I made a nomination to appoint one of the local attorneys and my Motion was seconded.  Then an Alderman made a Motion to appoint another one of the local attorneys and his Motion was seconded.  The matter then was called by the Mayor for a vote and one Alderman abstained.  Thus the situation was that there were two attorneys on the table recommended and the Mayor broke the vote and voted for the attorney that was put forward by the Alderman.

My question that involves the Ethics Commission is whether or not since the Alderman has been a lengthy renter of commercial property owned by the attorney he recommended is this ethically correct.  The attorney which he recommended rents a building to the Alderman and is in a contractual arrangement with him.  As attorney for the Board the Alderman votes on this attorney’s salary as well as approves his bills for expenses each month.
I have read the Mississippi Code that spoke to the issue as well as Section 109 of the Constitution.  I would like to know what the Ethics Commission’s opinion would be and is as to the Alderman continuing to vote and approve expenses and salary for an attorney with which he has an ongoing contractual relationship outside the employment of the City.

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

These facts involve past action, and this opinion provides no indemnity from liability for past action. This opinion is issued for informational purposes only.
Section 109, Miss. Const. of 1890, and its statutory parallel, Section 25-4-105(2), Miss. Code of 1972, both quoted above, prohibit a member of a public board from having any direct or indirect interest in a contract with the government authorized by that board during his or her term or for one year thereafter. Frazier v. State, ex rel. Pittman, 504 So.2d 675, 693 (Miss. 1987). The city attorney will have a contract with the government, authorized by the board of aldermen, during this alderman’s term. The alderman apparently has no direct interest in the attorney’s contract. Thus, the only question is whether the alderman has an indirect interest in the attorney’s contract, via his tenant/landlord relationship with the attorney.

When a board member receives income from another individual or jointly with that person, the common finances can give the board member an interest in the other person’s income. For example, if the alderman were the landlord rather than the tenant and received rent from the attorney, the alderman would have an incentive to ensure the attorney’s financial well-being. The alderman would want his tenant to have sufficient income to make his rental payments in a timely fashion, even if they increase. This personal, pecuniary interest in the attorney’s finances could compete with the public interest the alderman was elected to represent and cloud his judgment in the selection of an attorney. These competing personal and public duties result in a conflict of interest prohibited by Section 109 and Section 25-4-105(2).

By contrast, the facts at hand do not present such a prohibited interest. Here the alderman is paying the rent, not receiving it. Therefore, the alderman in question has no financial interest in the city’s contract with the city attorney, and no violation of the Ethics in Government Laws should result if the city contracts with the alderman’s landlord.

Nor would the alderman violate Section 25-4-105(1), Miss. Code of 1972, if he participates in the process of selecting a city attorney. That subsection prohibits an alderman from voting, debating or otherwise using his official position to obtain a monetary benefit for a “business with which he is associated.” That term is defined in Section 25-4-103(d) as a business in which the public servant has a certain ownership interest, from which he receives a certain level of income or over which he exercises some control. Here there is no evidence that the attorney’s practice is a business with which this alderman is so associated. Consequently, the alderman is not restricted from taking official action which would benefit the attorney financially.
 

Scott Rankin
Executive Director