ADVISORY OPINION NO. 06-078-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.

(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.

(i) “Income” means money or thing of value received, or to be received, from any source derived, including but not limited to, any salary, wage, advance, payment, dividend, interest, rent, forgiveness of debt, fee, royalty, commission or any combination thereof.

(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.

In an effort to follow up on the request for an official opinion on the ethical feasibility of a company of which I am co-owner with another individual, conducting business with a state university’s agency, I now submit to you information removing myself and the company, as a joint venture, from business affiliations with [a state university], for obvious reasons, relating to my capacity as a state elected official [legislator]. However, [my business partner], who also operates a separate business, which he is sole proprietor and which I have no operational or pecuniary interests, still seeks to maintain business affiliations with [the state university]. My inquiry now, as it relates to the individual’s business with the state university, is whether or not it is ethically feasible for the two entities to engage in business dealings.

As a state elected official, it was never my intent to engage in business practices that would be deemed unethical due to my political office. Again, I ensure you that any benefit by [my business partner] through this endeavor, will be his solely.

The requestor also provided additional information in conversations with the Commission’s staff prior to submitting this request. The business activity in issue would be the transportation and sale of an agricultural commodity. This is a normal activity of the requestor’s business. However, the requestor’s partner would conduct this business activity in his individual capacity, independently from the requestor’s corporation and would use rented equipment which does not belong to the corporation. Furthermore, neither the requestor nor his corporation would receive any income, directly or indirectly, from the partner’s transactions with the university. A representative of the university also reported that they were seeking the commodity for experimental purposes, that the commodity is not readily available in large quantities and that he had been unable to locate another supplier which could deliver sufficient quantities.

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 the Legislature from having any direct or indirect interest in a contract with the government which is funded or otherwise authorized by the Legislature during his or her term or for one year thereafter. Frazier v. State, ex rel. Pittman, 504 So.2d 675, 693 (Miss. 1987). The university in question here is funded by the Legislature, and the proposed purchase would reportedly be paid for with funds appropriated by the Legislature. Thus, the requestor is strictly prohibited from having any financial interest in such a transaction. In this instance, if neither the requestor nor his corporation receive any income, directly or indirectly, from the partner’s transactions with the university, and if the partner conducts this business activity in his individual capacity, independently from the requestor’s corporation using rented equipment which does not belong to the corporation, then the requestor will have no interest, direct or indirect, in the partner’s transactions with the university. Therefore, no violation of Section 109 or Section 25-4-105(2) should arise from these facts.

Pursuant to Section 25-4-105(3)(a), Miss. Code of 1972, no public servant of the state may be a contractor, subcontractor or vendor to the state or have a “material financial interest” in a business which is a contractor, subcontractor or vendor to the state. Again, under the specific facts stated above, neither the requestor nor his corporation will be a contractor, subcontractor or vendor to the state, and no violation of Section 25-4-105(3)(a) should occur.

MISSISSIPPI ETHICS COMMISSION


BY: Tom Hood, Executive Director and
Chief Counsel