Issue 1. May a board of supervisors appoint a board attorney and pay him additional money as bond counsel and/or for any litigation throughout the year?
Issue 2. May a board attorney be present when the board of supervisors considers the appointment of outside counsel?
Issue 3. May a board of supervisors pay its board attorney or the board attorney's firm upon receipt of a single statement for work on a bond issue or are itemized statements for specified work required?
Issue 4. May a board of supervisors pay both a local attorney as bond counsel and another law firm as bond counsel on the same bond issue?State law restricts the Mississippi Ethics Commission 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, this opinion does not address the Mississippi laws outside the Commission's jurisdiction nor the governmental entity's internal rules and regulations.
The pertinent conflict of interest laws to be considered here are:
Code Section 25-4-103(f)(i)(ii), (g)(i), (h), (1), and (p)(i)(ii)(iii) states:
"(f) 'Contract' means:
Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.(i) Any agreement to which the government is a party; or(g) 'Governmental' means the state and all political entities thereof, both collectively and separately, including but not limited to:(ii) Any agreement on behalf of the government which involves the payment of public funds.
(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.(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 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."Code Section 25-4-105(1) and(3)(a) 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."
We have recently completed the issuance of a $6M road bond issue and are facing a likely $25M bond issue. I began to review the first bond issue in an effort to project expenses on the new $25M bond issue. Several things have disturbed me. After consulting with the county's accounting department, more questions came up for which we did not have any answers. I thought it best to get an unbiased opinion that was legally defensible in order to leave it alone or take action - whether it needs to be corrective or preventive.
Does the board order appointment of the county board attorney allow us to appoint and pay him additional money as bond counsel and/or any litigation throughout the year? Does his presence during the discussion and decision to hire outside counsel present an ethical dilemma by creating inherent pressure on us to hire his firm? Does the motion concerning the issuance of a bond issue authorize us to make payments to the county board attorney's firm as a single billing, or should itemized payments have been paid to the county board attorney for specified additional work as board attorney or does it matter? Does existing AG opinions authorize us to pay the county board attorney's firm as bond counsel and another law firm also as bond counsel? Obviously, my concern is to ensure we participate in ethical billing practices and proper payment of our counsel in conjunction with the past and future bond issues.The Commission formally adopts Advisory Opinion No. 96-055-E in response to this request and by attachment incorporates it into this opinion.
Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is as follows.
Issue 1. The conflict of interest laws do not prohibit a board of supervisors from selecting its attorney(s) and prescribing the duties and compensation of its attorney(s) as authorized by Code Section 19-3-47. It is paramount in the client-lawyer relationship that a client select an attorney that the client feels has the required knowledge and skill to represent the client's interests. This is equally true when the client is a governmental entity protecting the public's interest.
However, the attached opinion explains that the conflict of interest laws prohibit multiple contracts between a county board of supervisors and the same attorney or firm of attorneys.
The attached opinion states:
"Code Section 25-4-105(3)(a) prohibits a law firm and its members that serve as the regular attorneys for the county board of supervisors from being a contractor, subcontractor and vendor with that same county board of supervisors. This prohibition arises because the law firm and its members as employees and/or agents of the county are public servants of the county as defined in the above cited Code Section 25-4-1 03(p)(ii).If the contract employing the law firm provides that its duties as the county's regular attorneys include serving as bond counsel and sets the compensation for such service, then the law firm and its members would not be violating Code Section 25-4- 105(3)(a).
However, a law firm that a county employs as its regular attorneys may not contract later to serve as bond counsel on a particular bond issue as to do so would violate Code Section 25-4-105(3)(a). The law firm and its members are public servants of the county under the original employment contract and therefore are prohibited from contracting with the county to provide bond counsel services under a second contract."In this instance, no specific written contract was entered into between the county board of supervisors and the county board attorney. There is a general order appointing the county board attorney at the salary of a member of the board of supervisors pursuant to 19-347, 1972 Mississippi Code Annotated. Also, there is a second order authorizing the bond issue and within that order an authorization for the county board attorney and another law firm "to handle the legal matter."
The board of supervisors may avoid confusion and comply with the conflict of interest laws by entering into a single contract with the attorney or firm of attorneys it wants to employ. The contract may include all or part of the duties specifically authorized in Code Section 19-3-47. Further, the contract should set out the compensation for those duties subject to the limits established in Code Section 19-3-47.
It is this Commission's understanding that the professional rules governing attorneys construe a contract with a law firm's member also as a contract with the law firm. A law firm partner cannot hold himself apart from the firm to represent one or more clients. Therefore, a governmental contract with an attorney/public servant's law firm is viewed by the conflict of interest laws as a contract with the attorney/public servant.
Issue 2. The conflict of interest laws do not prohibit a county board attorney from being present during the board of supervisors' discussions on employment of outside counsel. A board attorney should be present at and provide advice at any meeting when requested to do so by the board of supervisors.
However, the county board attorney should remain keenly aware of the above cited Code Section 25-4-105(1). This section prohibits a public servant from using his or her official position to obtain a pecuniary benefit for himself or herself or a business with which he or she is associated.
This Commission consistently has opined that one way to avoid a violation of Code Section 25-4-105(1) is for a public servant to properly recuse himself or herself from any meeting that may concern a pecuniary benefit.
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 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.
Regarding Issue 3 and Issue 4, the requestor is advised to consult with the Office of the State Attorney General and the Mississippi State Bar. Both entities have an opinion process that should be helpful in answering these concerns.
Ronald E. Crowe Executive Director