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 October 6, 1995.

May a municipality appropriate funds to a non-profit trust established to preserve history, culture and the arts in order to renovate an auditorium that is a state historic landmark located within the municipality when a member of the board of aldermen is also a board member of the non-profit trust?

         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.

          Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion. The referenced warranty deed because of its size is not attached but is available for review, absent identifying data, in the Commission's office.

          On December 6, 1994, the Board of Aldermen moved to deed the Auditorium, a State Historic Landmark, to the Trust for the Preservation of History, Culture, and the Arts. A copy of the warranty deed is attached.

This building was on the verge of collapsing when the Trust began Phase I of the renovation. $344,000 for roof repair has been spent from their funds. This Trust is a non profit organization.

The Trust is expecting $200,000 from the State Archives and History in February or March of 1996. But they need to keep the project going now. The Architect has stated that they will save 40% of the renovation of Phase II if they don't have to shut the job down and recall the workmen at a later date. The local banks will loan the Trust the money to continue, but the State Grant cannot be used to pay back a loan.

The Mayor recommended that the City appropriate $65,000 to insure that the Trust keep Phase II on track. This was passed with a 4/1 affirmative vote.

One individual serves on the Board of Directors of this Trust and is also a city alderman. We are concerned on whether it constitutes a conflict of interest.

          The alderman and I talked with a staff member of the Attorney General's Office.  He stated that since the alderman could not benefit from this Trust, there may be no problem.

However, he stated that you would have to make this determination. Directors of the Trust serve voluntarily, and this $65,000 will be earmarked for the building renovation only.

I have issued no check to the Trust and I await your opinion.

          In addition to the above facts, it is noted that in the warranty deed there is a covenant running with the auditorium property. The auditorium property reverts to the municipality should the property not be used for the civic, social, educational, cultural, moral, economic or industrial welfare of the municipality for a period of two (2) years. Furthermore, the property may be conveyed only to another not for profit corporation.

          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), (f)(i)(ii), (g)(ii), (h), (1) and (p)(i) 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 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.

(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:

(ii) Municipalities.

(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.

(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 government.

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."

          Based solely on the facts and circumstances presented by the requestor, the Commission finds that the non-profit trust is quasi-governmental in nature in that its purpose is to preserve property of historical or cultural importance for the benefit of the public. Therefore, an alderman serving on the non-profit trust's board while it receives funding from the municipality does not as such violate the conflict of interest laws.

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

          Notwithstanding the above, the alderman would violate certain or all of the above cited conflict of interest laws should he receive compensation as a board member of the non-profit trust or should he receive any personal pecuniary benefits from contracts with the non-profit trust.

          Furthermore, the alderman's relatives and/or businesses with which he is associated cannot receive pecuniary benefits from contracts with the non-profit trust while it is receiving funding approved and/or supported by the alderman.
 
 
 

Ronald E. Crowe Executive Director