ADVISORY OPINION NO. 06-007-E
February 3, 2006
| Question Presented: | May a municipality renew a depository contract with a local bank
which employs the roommate of a potential candidate for alderman if the
candidate is elected and the roommate continues to receive an annual
bonus from the bank which is based on profits derived from deposits including
those belonging to the city? |
| Brief Answer: | No. The requestor and her roommate share a common financial interest because they share living expenses. If elected, the requestor will have a prohibited indirect interest in the depository contract, and a renewal of that contract would constitute a violation of Section 109 and Section 25-4-105(2). |
The Mississippi Ethics Commission issued this opinion on the date shown above
in accordance with Section 25-4-17(i), Mississippi Code of 1972, as reflected
upon its minutes of even date. The Commission is empowered to interpret and
opine only upon Article IV, Section 109, Mississippi Constitution of 1890,
and Article 3, Chapter 4, Title 25, Mississippi Code of 1972. This opinion
does not interpret or offer indemnity from liability for any other laws, rules
or regulations. The Commission based this opinion solely on the facts and circumstances
provided by the requestor as restated herein. The indemnity provided under
Section 25-4-17(i) is limited to the individual who requested this opinion
and to the accuracy and completeness of these facts.
I. LAW
The pertinent Ethics in Government Laws to be considered here are as follows,
to wit:
Section 109, Miss. Const. of 1890.
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.
Section 25-4-103, Miss. Code of 1972.
...
(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.
...
(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.
...
Section 25-4-105, Miss. Code of 1972.
...
(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.
...
II. FACTS
Facts provided by the requestor are set forth below, with identifying information
redacted, and are considered a part of this opinion.
I am very interested in running for City Alderman. My situation is this: My sister and I live together and she is employed with a Bank in our City. It is my understanding that the Bank is the depositing bank for the City’s operating accounts. My sister’s job is Assistant to the Executive Vice President. She is an hourly employee handling administrative duties. Her yearly bonus, while based on the bank’s performance was 3% of her yearly income. All bank employees, from tellers to the CEO, received the same 3% bonus.
III. ANALYSIS
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 requestor
and her sister share a common financial interest because they share living
expenses. Those shared finances give the requestor an interest in her sister’s
income. If the sister’s income is derived
in part from profits the bank receives in connection with the city’s
depository contract, then the requestor, if elected, will have a prohibited
indirect interest in that depository contract.
While the Commission has previously held a bank employee who receives only
an hourly wage may have no interest in a governmental depository contract,1 these facts are different. Here the bank employee receives an annual bonus
which is tied directly to the bank’s profits.
Those profits are derived in part from the depository contract with the city.
Therefore, if the requestor is elected and her sister’s bonus remains
unchanged, the requestor will have a prohibited indirect interest in the depository
contract, which will operate to prohibit the city from renewing the current
depository contract with the bank in question. Under the present facts, a renewal
of the current depository contract would constitute a violation of Section
109 and Section 25-4-105(2)
if the requester is a member of the board of alderman at the time the contract
is renewed.
MISSISSIPPI ETHICS COMMISSION
BY: Tom Hood, Executive Director and
Chief Counsel
1 See Ops. Miss. Ethics Commn. No. 05-120-E, 05-112-E and 05-012-E.