Mec 1996 July Adv Opi no 96-073-E

OFFICIAL ADVISORY OPINION NO. 96-073-E July 12, 1996

This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on July 12, 1996, basing its approval solely on the facts and circumstances stated herein.

May a county economic development district purchase printing services from a printing business owned by the brother of one of the members of the county economic development district's board of trustees?

Your opinion request to the Office of the Attorney General dated June 11, 1996, was referred by that Office to the Mississippi Ethics Commission on June 13, 1996, as your request involves the above issue that concern the Mississippi conflict of interest laws.

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:

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 25-4-101 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), (f)(i)(ii), (g)(i)(v), (h), (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.

(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:

(i) Counties; 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.

(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) 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.

(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."

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion. The additional documentation referred to in the requestor's letter is not set forth below but is available for review, absent identifying data, in the Commission's office.

The County Board of Supervisors under the authority of Section 19-5-99, Mississippi Code of 1972, as amended, established the County Economic Development District, herein-after referred to as the "District."

Enclosed please find a copy of the By-Laws of the "District." Section 7. Executive Director, page 8, states, "The Executive Director shall be the Chief Operating Officer of the District, work under the direction of the Board of Trustees and be responsible for the establishment of and administration of all policies, programs and procedures of the District. The Executive Director will perform other duties as assigned by the

Board of Trustees. The Executive Director shall be a non-voting member of any/all committees."

In an employment agreement with me it states, "Employee shall serve as Manager of the employer and/or in such other capacity within the employer's organization as the employer's Board of Trustees may from time to time specify. Employee in the absence of an Executive Director shall be responsible for the general administration and operation of the County Economic Development District."

The agreement then goes into all the language appropriate - the only reason for this language was to hire me as "Manager" because at the time it would have caused the Trustees to delay hiring as an Executive Director due to provisions in the then policy, and they solicited me to come in and operate as "Manager" until an Executive Director is named.

The Trustees do not authorize or become involved as to who we purchase supplies, services, etc. from. I present them a suggested "line item" budget, and as long as we do not exceed the adopted budget, the discretion to operate the District is left to the Manager.

My question: We have an appointed Trustee who has a brother in the printing business. The Trustee does not own, control, or have access to any part of the printing business. At no time does any Trustee vote on whether to do business with this or any printing firm, nor are they asked to. It is without their knowledge unless it was expensive enough to require a bid. My question does not relate to bids - just minor printing - envelopes - letter head paper - business cards, etc.

IS IT A CONFLICT OF INTEREST OF THE APPOINTED TRUSTEE if I as Manager do business with the printing firm owned by a brother?

The Commission formally adopts Advisory Opinion No. 96-018-E in response to this request and by attachment incorporates it into this opinion. The member of the county economic development district's board of trustees and the county supervisor in the attached opinion are both board members of governmental entities and therefore the conflicts of interest laws apply to them in the same ways.

Based solely on the facts and circumstances presented by the requestor, the Commission's opinion is as follows.

The trustee's county economic development district may do business with his brother's printing company as a brother is not a "relative" under the Ethics in Government law's definition set forth in the above cited Code Section 25-4-103(q).

Notwithstanding the above, this 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, a county economic development district's purchasing of printing services from a printing company owned by one of its trustee's brother has the potential of creating suspicion among the public and reflecting unfavorably upon the county.

Notwithstanding the above, the trustee may not have an interest, direct or indirect, in his brother's printing company as such an interest would result in the brother's company's contracts with the county economic development district being prohibited by the above cited Constitutional Section 109 and Code Section 25-4-105(2) and/or (3)(a).

The requestor is cautioned to advise the trustee that a recusal or an abstention will not prevent a violation of Constitutional Section 109 or Code Section 25-4-105(2) and (3)(a). Even without the trustee's vote, the authorization by the county economic development district's board of trustees to purchase from a company in which the trustee has an interest, direct or indirect, nonetheless results in a contract in which the trustee has a prohibited interest.

Ronald E. Crowe Executive Director