ADVISORY OPINION NO. 06-067-E

October 6, 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.

(e) “Compensation” means money or thing of value received, or to be received, from any person for services rendered.

(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.

(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 an alderman for the City. As of August 31, 2006, the County Economic Development Partnership (CEDP) will be without an executive director. I am interested in applying for the position. I would like to know if a conflict of interest would occur due to my elected status within the City. I am enclosing a copy of a Senate Bill, which provided for the creation of the CEDP.

III. ANALYSIS

Pursuant to Section 2 of the Senate Bill provided by the requestor, the Partnership is a not-for-profit corporation. Three members of the governing board of the Partnership are appointed by the same board of aldermen of which the requestor is a member, as mandated in Section 3 of the bill. The Partnership receives both public and private funds, and the publicly funded portion of its budget must be approved by the board of aldermen, according to Section 8 of the legislation, which reads as follows:

The governing authorities of the City ... and the Board of Supervisors of [the] County shall have the authority to approve or disapprove of all or any portion of the budget presented pursuant to this subsection and no expenditure of such tax revenue shall be made unless it is contained in a portion of such budget that is approved by the governing authorities of the City ... and the Board of Supervisors of [the] County.

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 funded or otherwise 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). If the action by the board is mandated by law and not discretionary, then no violation will arise. Frazier at 700-701. For example, a board of aldermen must approve the funding structure submitted by a municipal separate school district, and no violation will automatically arise if an alderman is employed by the school district. Id. However, the budget approval by the board of aldermen contemplated in the bill quoted above is clearly discretionary. Therefore, the requestor may not be compensated by the Partnership from public funds.

Moreover, the Partnership is not a governmental agency, even though it is established by the Legislature and receives public funds. It is a private, not-for-profit corporation. Pursuant to Section 25-4-105(1), Miss. Code of 1972, the requestor may not use his position on the board of aldermen to obtain monetary benefit for the Partnership. Thus, even if the requestor is ultimately employed by the Partnership and compensated and reimbursed entirely with private funds, he must fully recuse himself from any matter coming before the board of aldermen which affects the Partnership, even appointments to the Partnership’s governing board. Compare Ops. Miss. Ethics Commn. No. 04-022-E, 99-026-E, 98-023-E and 98-013-E.

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 staff 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. 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.

MISSISSIPPI ETHICS COMMISSION


BY: Tom Hood, Executive Director and
Chief Counsel