1. May a state university receive a grant awarded from a state agency if an employee of the state university reviewed certain grant applications for the state agency other than the application submitted by his state university employer?2. If this is not a conflict of interest, please provide clarification regarding conflict of interest concerns should a similar situation arise in the future?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 governmental entities are not addressed by this opinion.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(c), (d), (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 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.(g) 'Government' 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).(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 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 funded by 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) 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.(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 identifying data, are set forth as follows and considered a part of this opinion.On December 13, 1995, an Institute at the State University received notification of a grant award from the State Agency under a certain Support Services Program. On December 15, 1995, the State University received a call from the State Agency stating that the award was rescinded due to a perceived conflict of interest. An Official of the State Agency, however, has requested that we seek a review from your commission. A decision of whether or not to release funds to the State University will be made by the State Agency based on your review.The circumstances as we understand them are as follows. One of our faculty was asked by the State Agency to serve on a review committee for the grants to be funded under the Service competition. At a meeting with the State Agency prior to the review, a committee determined that reviewers would not be allowed to review a grant proposal from their agency or their geographical area. The State Agency maintains that they requested that any reviewer knowledgeable of an application being submitted from their agency remove themselves from the review committee. The faculty member agreed to serve on the committee, unaware that the Institute at the State University was submitting an application. In fact, no list of applicants was ever provided to him. The Institute at the State University, in preparing the application, was unaware of any conflict of interest policy and was not aware that the faculty member was serving as a reviewer.Only applications from outside the State University's geographical area were sent to the faculty member for review. The faculty member was not informed that an application from the State University had been submitted nor was he asked to remove himself from the committee. It was only after the faculty member completed and submitted his reviews to the State Agency that he learned of a State University application, and he was never involved in its review. He was also not involved in the final selection of grantees made by the State Agency based on the reviewer's comments. The faculty member is in no way affiliated with the Institute at the State University, and neither he nor his School will receive funds from the grant.Needless to say, the Institute and the State University expended a great deal of time and effort in preparing the grant application. Many community agencies supported the application through cost sharing. This grant has the potential of benefiting many citizens from this geographical area. Therefore, we would appreciate a timely review by your staff The Official with the State Agency has 'agreed to hold funds for a short period of time, pending your review. Also, we have many faculty who serve on various committees within agencies from which we receive grants. A clarification of conflict of interest regulations would assist us in determining appropriate roles as we strive to work with state agencies.The Commission formally adopts Advisory Opinion No. 95-044-E 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 as follows. Since the factual situation of this Issue has already occurred, this opinion will be void should any additional facts be discovered to be contrary to the information stated herein.
Issue 1. It is not a violation of the conflict of interest laws for the faculty member to review grant applications for the State Agency even though the faculty member's State University employer was awarded the grant as long as the faculty member was not aware the State University had applied for the grant and the faculty member does not receive direct or indirect personal pecuniary benefit from the grant awarded to the State University.
The violation of Code Section 25-4-105(3)(a), cited above, addressed in the attached opinion does not apply here as the State University is not a "business" as defined in Code Section 25-4-103(c), cited above.
The violation of Code Section 25-4-105(5), cited above, addressed in the attached opinion does not apply here as the faculty member was unaware of the fact that the State University had applied for the grant.
Issue 2. In regard to clarification of the conflict of interest laws that may apply in similar situations as presented herein by the requestor, the Commission offers the following recommendations.
All faculty members should be keenly aware of the above cited Code Section 25-4-105(1).
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, faculty members may not participate in a grant review process in which they or their department will be a recipient of the grant proceeds. A faculty member who will in some way personally receive a pecuniary benefit from a grant should totally and completely recuse himself or herself from the grant application review process.
A total and complete recusal requires that the faculty member not only avoid being personally involved in the grant application review process but also avoid discussing or communicating with anyone from his or her State University involved in the review process. This includes casual comments, as well as detail discussions, made in person, by telephone or by any other means.
In addition, faculty members also should be keenly aware of the above cited Code Section 25-4-105(5). The requestor is referred to the attached opinion for the discussion concerning Code Section 25-4-105(5).
A faculty member having knowledge of his or her State University's application for a grant could easily violate Code Section 25-4-105(5) if he or she were involved in the grant application review process. This is especially true when the reviewers are part of a restricted number of persons with knowledge of the identity of the grant applicants.
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.
This public policy is set forth in the statute as a goal public servants and public entities are to strive to meet.
Meeting this public policy in the grant review process can be satisfied by either of the two standards alluded to in the requestor's letter. That is by either restricting reviewers by prohibiting them from reviewing grant applications and from knowing the identity of grant applicants from their geographical area or absolutely prohibiting reviewers from participating in the grant application process should their public entity employer apply for the grant.
Notwithstanding the above, the requestor is advised that any time faculty members are involved in a grant application review process in which they or their specific departments are seeking to or do benefit from the grant there will be serious conflict of interest questions raised and there will be a great potential for violating the conflict of interest laws.
Ronald E. Crowe Executive Director