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 February 8, 1996.

May an insurance agency sell major medical insurance group coverage to a county when the insurance agency was formally co-owned by the board attorney for the county board of supervisors and his father and when the father and the board attorney are partners in a law firm?

         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 governmental entity are not addressed by this opinion.

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

         Code Section 25-4-103(g)(i), (h), (k)(i)(ii)(iii)(iv), (1), (m), (p)(i)(ii)(iii) and
         states:

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

(i) Counties.

(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.

(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 will not be deemed a pecuniary benefit.

(m) 'Person' means any individual, firm, business, corporation, association, partnership, union or other legal entity, and where appropriate a governmental entity.

(p) 'Public servant' means:

(i) Any elected or appointed official of 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.

(q) 'Relative' means the spouse, child or parent." Code Section 25-4-105(1), (3)(a) and (5) states:

"(1) No public servant shall use his official position to obtain pecuniary benefit for himself other than that compensation provided by law, or to obtain pecuniary benefit for any relative or any business with which he is associated.

(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.

(5) No person may intentionally use or disclose information gained in the course of or by reason of his official position or employment as a public servant in any way that could result in pecuniary benefit for himself; any relative, or any other person, if the information has not been communicated to the public or is not public information."

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion. I serve as attorney for the Board of Supervisors in our county. I also own an interest in an insurance agency which is owned and operated by my father.

That insurance agency had made a proposal to our county to write the major medical insurance group coverage on all county employees. Based on the favorable nature of the proposal, the board accepted. The application is now pending through the coverage is not in force.

Following some research and following telephone conversations with your office, we all now realize that this constitutes an ethical violation, though I assure you it was an innocent one.

Although I am a licensed agent, I have not actually participated in the marketing of insurance for quite some time. Therefore, I am taking steps to divest myself of all ownership interest in the agency and I am making a total, absolute, and complete severance of my business relationship with the agency. I do intend to continue to purchase my personal insurance through that agency.

Assuming that the county board at its next meeting, rejects the initial proposal, could the board then re-apply for the same coverage through the agency. By that time I will have no interest in the agency.

If that is unacceptable, may the county contact the company directly and re-apply for the coverage?

         Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is as follows.

         Code Section 25-4-l05(3)(a), cited above, prohibits a public servant from having a material financial interest in any business which is a contractor, subcontractor or vendor with the public servant's governmental entity. A material financial interest is defined in the above cited Code Section 25-4-103(k)(i)(ii)(iii)(iv).

         The requestor's divestment of his ownership interest and/or other interests in the insurance agency eliminate his material financial interest in the insurance agency. However, a material financial interest still remains because the father is a partner in the requestor's law firm.

         The Commission realizes that the requestor performs all of the work as attorney for the Board of Supervisors. However, it is the understanding of the Commission that under the professional rules governing attorneys any contract held by a member of a law firm is actually held by the firm. A law firm partner cannot hold himself apart from the firm to represent one or more clients. This understanding is consistent with opinions of the Mississippi State Bar.

         Based upon the above, the Commission finds that the law firm is an agent of the Board of Supervisors and thus its partners are public servants pursuant to Code Section 25-4-103(p)(ii). Therefore, the firm partners are prohibited by Code Section 25-4-105(3)(a) from contracting separately or having a material financial interest in a contract with the Board of Supervisors.

         The Commission also agreed that should the requestor be able to obtain an opinion from the Mississippi State Bar stating that he could, in fact, contract with a client apart from his firm, then the above portion of this opinion would, upon request, be taken under reconsideration.

         Should the father/partner divest his partnership in the firm and become associated with the firm through an "Of Counsel" relationship which contractually recognizes him as not being a partner or having a similar partnership relationship, and any legal business done for the firm would be under the terms of said contract, then the father would not be a public servant and Code Section 25-4-105(3)(a) would not apply so long as any legal services performed by the father were not for the County and he did not share in the firm's income from the County.

         Should the father no longer be a partner in the firm, the requestor also must remain keenly aware of the above cited Code Section 25-4-105(1) and (5). In order to avoid violations of Code Section 25-4-105(1) and (5), the county should reject the present proposals and have all interested parties reapply with the requestor totally and completely recusing himself from the matter.

         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, staff, employees 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.

         Code Section 25-4-105(5) prohibits a public servant from intentionally using or disclosing non-public information gained in the course of or by reason of one's official position that could result in a pecuniary benefit for the public servant, a relative or any other person. A person within the meaning set forth in Code Section 25-4-103(m), cited above, would include an insurance agency.

         The Commission does not comment on whether the requestor may have already violated Code Section 25-4-105(1) or (5).
 
 

Ronald E. Crowe Executive Director