This Advisory Opinion concerns the following issues 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.
 

Are members of an industrial board established by a joint resolution of a municipal governing board and a county board of supervisors subject to the Ethics in Government laws in regard to:

1. the prohibitions imposed by Constitutional Section 109;

2. their being "public servants" within the meaning set forth in the conflict of interest laws;

3. their authorization of purchases of goods and services, lease agreements and rental agreements being "contracts" within the meaning set forth in the conflict of interest laws;

4. the prohibition of their being a contractor, subcontractor or vendor with their governmental entity;

5. the prohibition of a business in which they have a material financial interest contracting with their governmental entity;

6. the prohibitions imposed by Constitutional Section 109 and Code Section 25-4-105(2), even though an exception found under Code Section 25-4-105(4) may otherwise apply;

7. their or businesses in which they have a material financial interest purchasing land that is under the jurisdiction of the industrial board; and

8. whether the board members recusing themselves from the actions addressed in Issue 3 and Issue 7 would prevent their being in violation of the conflict of interest 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.

         Pertinent facts and circumstances provided by the requestor, absent identifying data, in the form of the requestor's letter dated September 14, 1995, are attached and considered part of this opinion. The attachments referenced in the requestor' 5 letter because of their volume are not attached to this opinion but are available for review, absent identifying data, in the Commission's office.

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)(v), (h), (k)(i)(ii)(iii)(iv), (1), (p)(i)(ii)(iii) and (q) 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:

(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);

(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.

(I) '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;

(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), (2), (3)(a)(b)(d), (4)(b)(c)(d)(f) 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.

(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.

(1') Be a purchaser, direct or indirect, at any sale made by him in his official capacity or by the governmental entity of which he is an officer or employee, except in respect of the sale of goods or services when provided as public utilities or offered to the general public on a uniform price schedule.

(d) Perform any service for any compensation during his term of office or employment by which he attempts to influence a decision of the authority of the governmental entity of which he is a member.

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

(b) May be a contractor or vendor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which he is a member, officer, employee or agent where such contract is let to the lowest and best bidder after competitive bidding and three (3) or more legitimate bids are received or where the goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.

(c) May be a subcontractor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a subcontractor with any authority of the governmental entity of which he is a member, officer, employee or agent where the primary contract is let to the lowest and best bidder after competitive bidding or where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.

(d) May be a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent: (i) where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws; or (ii) where the contractual relationship involves the further research, development, testing, promotion or merchandising of an intellectual property created by the public servant.

(f) May have an interest less than a material financial interest in a business which is a contractor, subcontractor or vendor with any governmental entity.

(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."

          This opinion is being issued in reliance upon the requestor's assurances set forth in the attached letter that the questions, facts and circumstances presented therein have no connection to any existing litigation nor any person or persons involved in any existing litigation. Furthermore, this opinion applies solely to voting members of the industrial board.

          Based solely on the facts and circumstances provided by the requestor, the Commission is providing the following opinions.

          Issue 1. The industrial board members are public officers and as members of a public board are subject to the prohibitions imposed by Constitutional Section 109.

          Issue 2. The facts and circumstances provided by the requestor are sufficient to conclude that the industrial board members are "public servants" under the meaning set forth in Code Section 25-4-103(p)(ii). In addition, the industrial board members are "public servants" if they receive a per diem or travel expenses as provided in Code Section 25-4-103(p)(iii).

          Issue 3. The authorization of purchases of goods and services, lease agreements and rental agreements by the industrial board are "contracts" within the meaning of Code Section 25-4-103(f) if the industrial board is a party to the agreements or if under the agreements they approve payments from public funds.

          Issue 4. The industrial board members as public servants are prohibited by Code Section 25- 4-105(3)(a) from being a contractor, subcontractor or vendor with their governmental entity subject to the exceptions set forth in Code Section 25-4-105(4)(b)(c)(d)(f). Furthermore, as members of a public board they are prohibited by Constitutional Section 109 and Code Section 25-4-105(2) from having an interest in a contract approved by the board of which they are a member.

          Issue 5. The industrial board members as public servants are prohibited by Code Section 25- 4-105(3)(a) from having a material financial interest in a business which is a contractor, subcontractor or vendor with their governmental entity subject to the exceptions set forth in Code Section 25-4-105(4)(1,)(c)(d)(f). Furthermore, as members of a public board they are prohibited by Constitutional Section 109 and Code Section 25-4-105(2) from having an interest in a contract approved by the board of which they are a member. This would include a contract with a business in which one of the board members has a material financial interest.

          Issue 6. The Mississippi Supreme Court held in Frazier v. State, 504 So.2d 675 (Miss. 1987), that statutes exempting a public servant from the operation of the conflict of interest laws is unconstitutional and invalid to the extent it is attempted to be applied to a section of the State Constitution. Therefore, the exceptions set forth in Code Section 25-4-105(4) do not limit the operation of Constitutional Section 109. Furthermore, the exceptions set forth in Code Section 25- 4-105(4) are not applicable to Code Section 25-4-105(2) under the language of the statute.

          Issue 7. The joint resolution provided by the requestor states that the industrial board has jurisdiction over the sale of land belonging to the municipality and/or the county subject to the municipality and county's approval of the sale and the sale price. So without an authorization of the contract to sell the land by the industrial board there can be no sale. Therefore, a board member or a business in which a board member has a material financial interest is prohibited from purchasing land under the jurisdiction of the industrial board by Constitutional Section 109 and Code Section 25-4-105(2).

          Issue 8. The requestor is cautioned to advise the industrial board members that a recusal or an abstention will not prevent a violation of Constitutional Section 109 or Code Section 25-4-105(2). Even without a board member's vote, the authorization by the industrial board nonetheless results in a contract in which the board member has a prohibited interest.

          Notwithstanding the above, public servants are not to use their official positions to obtain a pecuniary benefit for themselves, their relatives or businesses with which they are associated as to do so violates Code Section 25-4-105(1). Public servants must recuse themselves from discussing or acting on any subject matter in which they, their relatives or businesses with which they are associated have a pecuniary interest.

          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. 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 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.
 
 

Ronald E. Crowe Executive Director