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 sole stockholder of a company that contracts with a state agency to perform economic development services in a specific geographical area of the state accept an employment position with a state university which involves working on economic, community and leadership development with public officials located in the specific geographical area covered by the state agency contract?

          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 entities 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 company has a contract with a state agency to provide services in support of Mississippi's designated Empowerment Zone (six counties that include 16 municipalities). Work focuses on keeping the state agency informed about developments with the federal program and helping the state agency coordinate its support of the effort.

The sole stockholder of the company has applied for a position as Assistant Director and/or Program Leader for Local Government and Leadership Development at a state university's Center for Economic and Community Development. This would involve working with officials throughout the specific geographical area of the state in the areas of economic, community and leadership development.

Would accepting the position at the state university pose a conflict of interest for the stockholder?

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

Code Section 25-4-101 states:

"The legislature declares that elective and public office and employment is a public trust and any effort to realize personal gain through official conduct, other than as provided by law, or as a natural consequence of the employment or position, is a violation of that trust. Therefore, public servants shall endeavor to pursue a course of conduct which will not raise suspicion among the public that they are likely to be engaged in acts that are in violation of this trust and which will not reflect unfavorably upon the state and local governments."

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

"(a) 'Authority' means any component unit of a governmental entity.

(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.

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

(i) Counties;

(ii) Municipalities;

(iii) All school districts;

(iv) All courts; 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.

          (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."

          Code Section 25-4-105(1), (3)(a), (4)(h) and (5) 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.

(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.

(4) Notwithstanding the provisions of subsection (3) of this section, a public servant or his relative:

(h) May be employed by or receive compensation from an authority of the governmental entity other than the authority of the governmental entity of which the public servant is an officer or employee.

(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."

          Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is that the sole shareholder of a company contracting with a state agency, to perform economic development services, accepting a position with a state university, to perform economic development services, as such is not prohibited by the conflict of interest laws.

          This opinion is based on a state agency and a state university being separate "authorities" of the same governmental entity, the state. This finding brings into effect the exception set forth in the above cited Code Section 25-4-105(4)(h).

          The requestor is cautioned to not use his position as an employee of the state university to obtain a pecuniary benefit for his or her company in violation of the above cited Code Section 25-4-105(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.

          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 board members, staff 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.

          In addition, the requestor should be keenly aware of the prohibition set forth in the above cited Code Section 25-4-105(5). This code section prohibits a person from intentionally using or disclosing non-public information gained in the course of or by reason of his or her public employment as a public servant that could result in a pecuniary benefit for the public servant, any relative or any other person.

          A person as used in Code Section 25-4-105(5) is defined in the above cited Code Section 25- 4-103(m). A person as defined in the above referenced code section can include a governmental entity such as a state agency.

          Therefore, the requestor may not use any non-public information gained through his or her public employment with the state university to benefit the requestor's company and/or the state agency.

          The issue presented by the requestor also must be viewed as it relates to Code Section 25-4-101, set forth above. This code section sets the tone for the conflict of interest laws as it is the Legislature's "Declaration of Public Policy." This public policy can be summarized as any circumstance having the potential of creating suspicion among the public and reflecting unfavorably upon the state or local government should be closely reviewed by public servants with the intent to reduce or eliminate any suspicion on the part of the public which detracts from the public's trust in state or local government

          Clearly, being a contractor with a state agency and an employee of a state university, when both result in compensation for working with local officials within the same geographical area on economic and community development matters, has the potential of creating suspicion among the public and reflecting unfavorably upon the state agency and the state university.
 
 

Ronald E. Crowe Executive Director