ADVISORY OPINION NO. 06-075-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.

(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.

(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.

(k) “Material financial interest” means a personal and pecuniary interest, direct or indirect, accruing to a public servant or spouse, either individually or in combination with each other. Notwithstanding the foregoing, the following shall not be deemed to be a material financial interest with respect to a business with which a public servant may be associated:

(i) Ownership of any interest of less than ten percent (10%) in a business where the aggregate annual net income to the public servant therefrom is less than One Thousand Dollars ($1,000.00);

(ii) Ownership of any interest of less than two percent (2%) in a business where the aggregate annual net income to the public servant therefrom is less than Five Thousand Dollars ($5,000.00);

(iii) The income as an employee of a relative if neither the public servant or relative is an officer, director or partner in the business and any ownership interest would not be deemed material pursuant to subparagraph (i) or (ii) herein; or

(iv) The income of the spouse of a public servant when such spouse is a contractor, subcontractor or vendor with the governmental entity that employs the public servant and the public servant exercises no control, direct or indirect, over the contract between the spouse and such governmental entity.

(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.

(3) No public servant shall:

(a) Be a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent, other than in his contract of employment, or have a material financial interest in any business which is a contractor, subcontractor or vendor with the governmental entity of which he is a member, officer, employee or agent.

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 writing for an opinion on a possible situation that I could be involved with as the Mayor of the City. The City currently pays an ambulance subsidy to an Ambulance Service and EMS Company is in the process of purchasing the business from the Owner of the Ambulance Service. Part of the agreement is that the contract from the City be transferred to the EMS Company.

My parents owned and operated another ambulance Company in the City for many years and during the time of their operation they built a building to operate their service out of. When they sold the business it continued to be used as an ambulance operation until the Ambulance Service assumed the contract for operations in the City and the County. Since that time the building has been rented for another retail business.

My father passed away in 2004 and in 2005 my mother deeded the building to me for long range planning purposes. She continues to receive the rental income from the building and pay all expenses associated with owning the property.

My question is – would it be a conflict of interest on my part to rent the building to EMS Company once they begin operation in the City? This is one of the only buildings in the area that are zone correctly and set up to house such an operation. The EMS Company is not going to use the same facility that the Ambulance Service operated from due to the Ambulance Service Owner having other business interest that use the same facility.

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). This prohibition applies to a mayor as a member of the governing authority of a municipality.

The requestor, as the titled owner of the property, will have an interest in any rental or lease contract with the EMS Company. That contract would be authorized and funded by the board of aldermen during the mayor’s term of office pursuant to the ambulance agreement and subsidy, in violation of Section 109 and Section 25-4-105(2). Any contract entered into in violation of Section 109 or Section 25-4-105(2) is null and void. Towner v. Moore, ex rel. Quitman County School District, 604 So.2d 1093, 1096 (Miss. 1992), quoting Smith v. Dorsey, 530 So.2d 5, 9 (Miss. 1988). A recusal will not prevent or ameliorate a violation of Section 109 and Section 25-4-105(2), as they do not require any affirmative act by an individual member but merely action by the board. Towner at 1100, and Waller v. Moore ex rel. Quitman County Sch. Dist., 604 So.2d 265, 266-267 (Miss. 1992).

Additionally, any business in which the mayor has a “material financial interest” is precluded from being a contractor, subcontractor or vendor to the town. Section 25-4-105(3)(a), Miss. Code of 1972. Depending upon the amount of rental income the requestor were to receive from the EMS Company, the requestor could acquire a material financial interest in that company. Certain statutory exceptions may sometimes apply to this prohibition, but none of those exceptions appear applicable to these facts. See Section 25-4-105(4)(b) & (d), Miss. Code of 1972, both quoted above.

MISSISSIPPI ETHICS COMMISSION


BY: Tom Hood, Executive Director and
Chief Counsel