This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The opinion is based solely on the facts and circumstances as stated below and was approved by the Commission on August 25, 1995.

May an appointee serve on a state commission that appropriates funds to local entities which it regulates when the appointee's spouse is a director of one of the local entities receiving the funds?

    The Mississippi Ethics Commission is restricted to interpreting and issuing opinions on Sections 25-4-101 through 25-4-119, 1972 Mississippi Code Annotated and Article IV, Section 109, Mississippi Constitution of 1890. Therefore, Mississippi laws outside the jurisdiction of the Commission and internal rules and regulations of the state governmental entity are not addressed by this opinion.

The pertinent conflict of interest laws to be considered here are:

Constitutional Section 109 states:

"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."

Code Section 25-4-103(e), (g)(v), (h), (p)(i)(ii)(iii) and (q) states:

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

(g) 'Government' means the state and all political entities thereof, both collectively and separately, including but not limited to:

(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.

(p) 'Public servant' means:

(i) Any elected or appointed official of the government;

(ii) Any officer, direct or indirect, 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

(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.

(q) 'Relative' means the spouse, child or parent."

Code Section 25-4-105(1) and (2) states:

"(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."

    Pertinent facts and circumstances provided by the requestor; absent identifying data, are set forth as follows and considered part of this opinion.

On behalf of the Board of Commissioners of the State Commission, I write to request your opinion about potential conflict of interest problems with respect to the newest member of the Board.

The Board of Commissioners is pleased to welcome the member as the newest commissioner. His wife is the director of his [resident county's local entity which this State Commission regulates and funds]. In this position, she works closely with the Board and the State Commission on matters relating to both policy and library finances.

Many of the questions that come before the Board of Commissioners of the State Commission relate to the funding and governance of the local public entities. Often the Board is required to take action on these questions. Past examples of such action include:

1.) policy related issues; i.e., What position should the Board take with respect to seeking state funding of health insurance for local entity employees?

2.) waiver issues; i.e., If a local entity cannot meet the requirements for receiving state funding, can a short-term waiver be granted?

3.) funding issues; i.e., How shall federal grant money be distributed among the library systems throughout the state?

Other local entities' directors already have expressed concern about conflict of interest on the part of the newest member. We request that you review Mississippi's statutes and regulations relating to this issue and advise us whether or not the newest member will need to recuse himself when certain issues arise. if the answer is "Yes", what are those issues?

The term for which the newest member was appointed began on July 1, 1995.

    In addition to the above facts and circumstances, the Commission's staff was provided the following additional information.

    The state commission has the responsibility to set eligibility standards which each local entity must meet. Under state law, the incentive for each local entity to meet these standards is the receipt of an annual appropriation from the state commission. This annual appropriation is to be used to supplement the salaries of the local entities' employees. The amount each local entity receives is determined by the state commission. The present system includes an equal lump sum payment to each local entity and an additional amount determined on a per capita basis.

    First, the Commission has consistently held that a benefit accruing to one spouse equally benefits the other spouse.

    Based solely on the facts and circumstances provided by the requestor, the Commission's opinion is that an appropriation by the state commission during the newest member's term, or for one year thereafter, to the local entity his spouse serves as director which directly or indirectly increases her personal compensation violates the above cited Constitutional Section 109 and Code Section 25- 4-105(1) and (2).

    Without the state commission's appropriation to the local entity, the compensation amount in the spouse's new employment contract would not increase. Therefore, the appropriation becomes part of the authorization process.

    The requestor is cautioned to advise the newest member that even though a recusal would prevent a violation of Code Section 25-4-105(1), it does not prevent a violation of Constitutional Section 109 and Code Section 25-4-105(2). Even without the member's vote, the authorization by the member's board nonetheless results in a contract in which the member has a prohibited interest.

    Should the state commission not be appropriating funds to the local entity employing the newest member's spouse, the member must remain keenly aware of the prohibition set forth in Code Section 25-4-105(1). This is especially true when matters before the state commission involve the local entity employing the newest member's spouse or director positions as held by the newest member's spouse.

    Code Section 25-4-105(1), cited above, prohibits public servants from using their official positions to obtain a pecuniary benefit for themselves, a relative or a business with which they are associated.

    In order to avoid using their official positions to obtain a pecuniary benefit, the public servants must totally and completely recuse themselves from subject matters providing the pecuniary interests. An abstention is a vote with the majority of the governing entity's board and therefore does not qualify as a recusal.

    A total and complete recusal requires that the public servant not only avoid debating, discussing or taking action on the subject matter during the official meeting, but also avoid discussing the subject matter with other board members, staff or any other person prior to and after the official meeting. This includes casual comments, as well as detailed discussions, made in person, by telephone or by any other means.

    Also in order to properly recuse oneself from a matter, the public servant must leave the room or area where such discussions, considerations and/or actions take place. The minutes of the governing entity's board should state the public servant left the meeting by showing him or her absent for that matter.

    A public servant violating the conflict of interest laws is subject to the penalties imposed by Code Sections 25-4-109 and 25-4-111, as well as, a civil action for damages and forfeiture of any pecuniary benefit received through the illegal contract as provided for by Code Section 25-4-113. The penalties that may be imposed by a circuit court upon a finding by clear and convincing evidence include removal from office and a civil fine of not more than $5,000.00.
 

Ronald E. Crowe Executive Director