ADVISORY OPINION NO. 06-072-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.

(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.

(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.

On January 19th of 2001, I was asked by the owners of [a Restaurant’s] property in [a City] to represent them as their exclusive agent in the marketing of their property (which is located close in proximity to the Interchange of [a state highway and a city avenue]).

After a period of time in late 2002, I was able to generate a buyer for a sum that was acceptable by the seller. Naturally, we began to proceed with the closing activities. Approximately, two weeks from the scheduled closing I was notified by MDOT that the entire subject property was being considered for the right-of-way acquisition for an overpass/interchange of [the Highway and Avenue]. In adhering to the Mississippi Real Estate Commission Regulations, I properly notified the prospective purchaser of any governmental or material changes that would affect the value of the property. Obviously, with this information the buyers withdrew their proposal and the property has been in limbo ever since. The highway department held is first public hearing regarding the issue and projected the project acquisition to take place in 2006.

In 2004, I was elected to the position of County Supervisor in the County and now serve as the President of that body. Since the original project was planned the Legislature has cut the highway department’s budget leaving not enough money to execute this project.

Recently, a [state university] and MDOT approached the County with a proposal to issue County Bonds to construct the [state highway and avenue] Interchange, as well as, [the Interchange of this Highway and another Highway]. These County Bonds would be used only as a vehicle for financing. There would be no county funds used, all of the debt services (principal & interest) would come from federal funds to the Mississippi Department of Transportation. There would be no city, county or university funds included.

This proposal by MDOT is picking up momentum in our county and in all likelihood will become a reality. Obviously, the highway department would be buying the Restaurant’s Property as a right-of-way with federal dollars through this County Bond vehicle. And while I did not generate the prospect, I feel sure that the owners will want to compensate me for my time and efforts in property management and securing the present lease. However, I will not receive a real estate commission on the sale of the property to the highway department. The property has not sold but I have been able to lease the property for the owners to [two restaurants].

In exercising an abundance of caution, I certainly seek your opinion on this matter to preclude me from an appearance of impropriety. I do not feel that I have a conflict of interest in this matter, but I do seek your confirmation from the public scrutiny standpoint.

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 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 Mississippi Transportation Commission (MTC) purchases this property without the necessity of an eminent domain proceeding, then there would be a contract between MTC and the property owners. If the county issues the proposed bonds for this project, then MTC’s purchase of the property would presumably be funded, at least in part, by the proceeds of those bonds and would, therefore, have been authorized by the board of supervisors. However, if the requestor receives no commission for such a county-funded sale to the state, then he would have no interest in that transaction, and no violation of Section 109 or Section 25-4-105(2) would result.

In addition, Section 25-4-105(1) prohibits a public servant from using his position in government to obtain a monetary benefit for himself or his business. One way in which a county supervisor could use his position is by voting on a matter which comes before the board. Thus, the requestor would be prohibited from voting on this bond issue if the bond issue would result in a pecuniary benefit to him or his business. But if the property is purchased by MTC, the requestor will lose the sales commission for which he has contracted and will only be compensated for past property management services, if at all. Under these facts, the requestor’s participation in voting on the proposed bond issue would not result in a pecuniary benefit to him or his business and would not give rise to a violation of Section 25-4-105(1).

MISSISSIPPI ETHICS COMMISSION


BY: Tom Hood, Executive Director and
Chief Counsel