May a county employee contract with his or her employing county through a construction company owned by the county employee during his or her employment and after termination of his or her employment?

    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 local governmental entity are not addressed by this opinion.
 

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

Code Section 25-4-103 (c), (d), (e), (f)(i)(ii), (g)(i)(v), (h), (k)(i)(ii), (1) and (p)(i)(ii)(iii) states:

"(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, an non-profit corporation or other such entity, association or organization receiving public funds.

(d) 'Business with which he is associated' means any business or 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' mean 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) 'Governmental' means the state and all political entities thereof, both collectively and separately, including but not limited to:

(i) Counties; 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.

(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).

(1) '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

('Ii) 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.

Code Section 25-4-105(1), (2) and (3)(a) 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.

(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."

I am writing to request an official opinion from your office concerning the legality of
a county employing one of its own employee's company for independent work and
continuing to employ such person's company for a period less than one (1) year after
leaving employment.

Pursuant to Miss. Code Ann. §25-4-105(2) (1972), "[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... "Miss. Code Ann. §25-4-105 (1972).

The specific facts in question are as follows. A County employed an individual from September 1, 1992 through February 28, 1993. During this time period, this individual's construction company, bearing his name, also performed work for the County. The first invoice the County paid to the individual's construction company is dated October 10, 1992, and the last invoice paid the individual's construction company is dated December 10, 1993.

    In addition to the above stated facts, the Commission's staff was advised that the individual was in a position commonly referred to as a "road employee." The individual's employment duties consisted primarily of operating county equipment The individual's construction company was paid on an invoice basis at a rate of $100.00 an hour. The invoices did not specify the related project nor type work performed.

    Based solely on the facts and circumstances provided herein, the Commission presents the following conclusions and reasons.

    During the specified time period, September 1, 1992 through February 28, 1993, the contract between the county and the employee's construction company was not prohibited by the above cited Code Section 25-4-105(3)(a).

    Code Section 25-4-105(3)(a), as set forth above, prohibits a contract between an "employee" and the employer county since the effective date of its amendment on July 1, 1994.

    However, prior to the amendment, the Mississippi Supreme Court held in Attorney General Mike Moore and the Mississippi Ethics Commission et rel Chickasaw County Mississippi v. Durwood McCullough, 633 So.2d 421 Miss. 1993), that "employee is not a classification synonymous with 'member'."

    Therefore, Code Section 25-4-105(3)(a) prohibited only board members from being
contractors, subcontractors or vendors with their governmental entity up to and until July 1, 1994.

    All members, officers, employees or agents are prohibited from being contractors, subcontracts or vendors with their governmental entity from an a er July 1, 1994.

    The contract between the county and the employee's construction company was not prohibited by the above cited Code Section 254-105(2).

    Code Section 25-4-105(2) referred to in the requestor's correspondence is applicable only to public servants that also are members of the board which authorizes a contract. In this instance the public servant was not a member of the authorizing board. The public servant is a county "road employee" and the authorizing board is the "county board supervisors."

    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.

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

    In fact, the public servant should not be present in the room or area where the governing authority is discussing, considering and/or acting on the subject matter. The minutes of the governing authority should reflect the absence of the public servant during the meeting(s) in which the subject matter is addressed.
 
 
 
 

Ronald E. Crowe Executive Director