ADVISORY OPINION NO. 06-032-E

May 12, 2006

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.

(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:

(i) Counties;

(ii) Municipalities;

(iii) All school districts;

(iv) All courts; and

(v) Any department, agency, board, commission, institution, instrumentality, or legislative or administrative body of the state, counties or municipalities created by statute, ordinance or executive order including all units that expend public funds.

(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.

(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.

(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.

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 requesting your opinion on the following:

I am an alderman in my hometown. Recently, I purchased 20% of a LLC, which is a commercial and residential real estate development. This property is located in the city limits and is also in the ward I represent.

From an alderman’s standpoint, would this limited involvement sustain my voting rights on decisions that come before the town board, such as water, sewer, etc?

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). In this context “authorized” means more than just the obvious act of approving a contract. It also means appropriating money. An appropriation of public money which ultimately funds a contract is an action which authorizes that contract. See Frazier, citing Cassibry v. State, 404 So. 2d 1360, 1366-67 (Miss. 1981). However, a license or regulation, such as a variance or zoning change, is not a contract. Mississippi Ethics Commission v. Aseme, 583 So.2d 955 (Miss. 1991).

Section 25-4-105(1), Miss. Code of 1972, quoted above, prohibits a public servant, including a member of the board of aldermen, from using his official position to obtain a pecuniary benefit for himself, a relative or a “business with which he is associated,” as that term is defined in Section 25-4-103(d). As an owner of twenty percent of the business, the LLC is certainly a business with which the requestor is associated, and he is prohibited from using his position to obtain a monetary benefit for the LLC.

Any action an alderman takes in his or her role as alderman constitutes a use of position. Such actions include, but are not limited to, casting a vote, discussing a matter in a board meeting and private and public conversations with other aldermen about a matter of city business. For instance, the requestor himself would be prohibited from participating in an action if it would result in a pecuniary benefit to the LLC, such as an appreciation in the value of the real property. If such a use of position resulted in a monetary benefit to the alderman or his LLC, then a violation of Code Section 25-4-105(1) would accrue.

Thus, the alderman must recuse himself from any action which could result in a pecuniary benefit to him or the LLC. A total and complete recusal requires that the public servant not only avoid debating, discussing or taking action on the subject matter during official meetings or deliberations, but also avoid discussing the subject matter with city employees or any other person. This includes casual comments, as well as detailed discussions, made in person, by telephone or by any other means. An abstention is considered a vote with the majority and is not a recusal. Voting against the measure is also insufficient to fully effect a recusal.

Furthermore, the minutes of the meeting should state the recusing member left the room before the matter came before the public body and did not return until after the vote. A recusal will not prevent or ameliorate a violation of Constitutional Section 109 and Code Section 25-4-105(2), as they do not require any affirmative act by an individual member but merely action by the board.

MISSISSIPPI ETHICS COMMISSION



BY: Tom Hood, Executive Director and
Chief Counsel