This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances ftirnished by a requestor. The opinion is based solely on the facts and circumstances as stated below and was approved by the Commission on June 9, 1995.
 

May a board member of a state district be appointed to the advisory board of a bank that serves as a depository of the district?

     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(c), (d), (e), (t)(i)(ii), (g)(v), (h), (k)(i)(ii), (1), (m) 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, a nonprofit corporation or other such entity, association or organization receiving public flinds.

(d) 'Business with which he is associated' means any business of 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.'

(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 flinds.

(g) 'Government' means the state and all political entities thereo{ 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 flinds.

(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 spousQ 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 two percent (2%) 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.

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

(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 flinded by public flinds; or

(iii) Any individual who receives a salary, per diem or expenses paid in whole or in part out of flinds authorized to be expended by the government."

"(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.

(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 identifing data, in the form of the requestor's letter dated June 2, 1995, are attached and considered part of this opinion.

     The following is based on the understanding that the only "compensation" that the district board member will receive from the bank is the $1,800.00 annual stipend. The Commission should be immediately notified should the district board member receive or expect to receive additional income from the bank such as, but not limited to, stock dividends, expense reimbursements, per diem, etc. This advisory opinion may no longer be in effect should the district board member's compensation from the bank exceed the $1,800.00 annual stipend.

     The Commission formally adopts Advisory Opinion No. 95-038-E, with attachments, in response to this request and by attachment incorporates it into this opinion.

     Based solely on the facts and circumstances provided by the requestor, the Commission's opinion is that the district board member, as long as he serves on the bank's advisory board, would have an interest in any contracts between the district and the bank entered into during his present term or any fliture terms and for one (1) year thereafter, in violation of the above cited Constitutional Section 109 and Code Section 25-4-105(2).

     Notwithstanding the above, the Commission finds the district board member's interest in the bank could reasonably be considered as "de minimis non curate lex."

     In Frazier v. State, 504 So.2d 675, (Miss. 1987), the State Supreme Court gave indication that some prohibited interests may be "de minimis" interests. In other words, the violation would be so minor as to not attract the courts' interest The Court gave no guidance on when it would classify an interest as "de minimis."

     As stated in the attached opinions, Code Section 25-4-103(k), cited above, cannot be applied as an exception to Constitutional Section 109 according to Frazier, supra. However, it does provide thresholds for determining whether an interest that is considered a "material financial interest" should be or should not be considered "de minimis."

     The district board member is cautioned to not use his official position to obtain a pecuniary benefit for the bank in violation of the above cited Code Section 254-105(1).

     Code Section 25-4-105(1) 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 detail 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.

     In this case the district board member should recuse himself from all matters coming before the district's board concerning the bank he serves as an advisory board member.

     Furthermore, the district board member is advised that intentionally using or disclosing non public information gained by reason of his official position that in any way could result in a pecuniary benefit to the bank and/or himself violates the above cited Code Section 25-4-105(5).
 

Ronald E. Crowe Executive Director