May members of a county board of supervisors serve on the board of local economic development and industrial development entities when their county is providing funding to these entities?

    Your opinion request to the Office of the Attorney General dated August 11, 1995, was referred by that Office to the Mississippi Ethics Commission on August 15, 1995, as your request involves an issue that concerns the Mississippi Ethics in Government laws.

    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 Separation of Powers Doctrine, Article I, Section 2, Mississippi Constitution of 1890, is an area of state law outside the jurisdiction of this Commission. Therefore, the Office of the Attorney General must address the application of the Separation of Powers Doctrine to this issue.

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

I direct this letter to your attention for and on behalf of the County Board of Supervisors.

    As you know, during the last several years there have been many questions raised concerning statutory and/or constitutional prohibitions insofar as supervisors serving on local boards which have public finding.

    Heretofore, at an earlier time, the Supervisors of this County resigned from the Economic Development Authority Board in this County in order to be sure that there could be no question as to their service. They now have been asked to again serve on the Board and they have heard different stories from different supervisors as to whether or not it is proper for a member of the Board of Supervisors to serve on one of these boards.

    Accordingly, on behalf of the County Board of Supervisors I request your opinion as to the legality of a member of the County Board of Supervisors serving on the Economic Development Authority Board or on the Industrial Development Corporation Board of the County when each of those organizations receive some pubic finding.

    The requestor provided the following information to the Commission's staff in addition to that provided in the letter of request.

    The local economic development authority is a non-profit corporation established by local and private legislation. The local and private legislation gave the county and the municipalities located therein the power to establish the authority and appoint its members.

    The local industrial development corporation is affiliated with the local Chamber of Commerce and is also a non-profit corporation. The county has the power by local and private legislation to annually appropriate up to $5,000.00 to the corporation.

    Both, the economic development authority and the industrial development corporation have as their purpose the enhancement of industry and the promotion of economic growth in the county and the municipalities located therein.
 

The pertinent conflicts 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(d), (e), (g)(i)(v), (h), (1), (p)(i) and (q) states:

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

(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.
 

(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.
 

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."

    The Commission formally adopts Advisory Opinion No. 95-081-E, with attachments, in response to this request and by attachment incorporates it into this opinion.

    Based solely on the facts and circumstances presented by the requestor, the Commission finds that economic development and industrial development entities of the type addressed above are quasi-governmental entities and therefore county supervisors serving on their boards when the supervisors' county is funding them do not as such violate the conflict of interest laws.

    This finding is based on any contractual interests, if any, being public in nature rather than private. The conflict of interest laws are applicable to competing private interests, not the competing interest of governmental entities.

    Notwithstanding the above, the county supervisors would violate certain or all of the above cited conflict of interest laws should they receive compensation as board members of the Economic Development Authority and/or the Industrial Development Corporation or should they receive any personal pecuniary benefits from contracts with these entities.

    Furthermore, county supervisors' relatives and county supervisors' businesses with which they are associated can not receive pecuniary benefits from contracts with the Economic Development Authority and/or the Industrial Development Corporation while the entities are receiving county funding approved and/or supported by the respective county supervisor.
 
 
 
 

Ronald E. Crowe Executive Director