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 member of a state commission simultaneously serve as the president of a non-profit corporation that receives funding from and contracts with a state agency affiliated with the state commission to develop and enhance a state natural resource in conjunction with the state commission and state agency?

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), (e), (f)(i)(ii), (g)(v), (h), (1) 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 of 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.

(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 finds.

(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.

(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 finds or which expends, authorizes or recommends the use of public finds; 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), (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.

(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."

I am writing to request an official advisory opinion from the Mississippi Ethics Commission on the following facts.

I am a commissioner on the State Commission. The State Commission is charged with the duty of managing certain of the State's natural resources and its powers and duties are exercised through the State Agency. The State Commission's powers and duties are set forth in a certain section of the Mississippi Code. However, it has other duties, powers and responsibilities established through out an entire chapter of the Mississippi Code.

I am presently the president of Non-profit Corporation. This non-profit corporation is incorporated under the laws of the State of Mississippi. I have enclosed a copy of its Charter of Incorporation. The corporation's purpose is limited solely to the development of one of the State's natural resources.

The monies received by Non-profit Corporation are derived solely from public grants and private donations and are wholly expended upon the development of one

particular natural resource of the State. The corporation is simply a conduit for money received from grantors and donors to those who actually do the work of creating structures to enhance the natural resource. The corporation's work is civic and public in nature. Its purpose is solely to provide, encourage and promote recreation and recreation facilities for development of this one particular natural resource of the State for the use and benefit of all members of the public.

As president of Non-profit Corporation, I do not nor ever have I received a salary or compensation of any description. I receive no pecuniary benefit of any description by virtue of being a member or president of Non-profit Corporation. I do not receive compensation for expenses incurred while discharging the business of the corporation. In addition, Non-profit Corporation has no outstanding loans against it. In fact, the corporation has never sought or received any loans.

Recently, the State of Mississippi made available through the State Agency a specific amount of funds for creating or enhancing structures for this one particular natural resource of the State. The source of these funds was from a 1996 appropriation from certain special funds. Under the agreement, Non-profit Corporation would match these funds in the amount of 10 percent, raised from other donors. The State Agency and Non-profit Corporation attempted to enter into a contract in which these funds would be expended for the purpose of developing this one particular natural resource of the State. Under the proposed agreement, Non-profit Corporation would be responsible for the delivery and deployment of certain structures related to this one particular natural resource of the State. Non-profit Corporation would not itself perform the work, but would hire out the work. One of the terms of the proposed contract provides that no resident commissioner will be permitted to share in any part of the agreement or receive any benefit arising from the agreement.

A certain state agency received from the State Agency a request for approval of the agreement just described. However, it returned it without action, calling attention to a Mississippi Ethics Commission's opinion.

This agreement has not been executed or otherwise consummated and no funds have been transferred from the State Agency to Non-profit Corporation.

Given the facts presented herein, my question is as follows. Is it a violation of the State conflict of interest laws for the State Agency to fund and to contract with Non-profit Corporation, as described above, when I am a commissioner for the State Commission and president of Non-profit Corporation?

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

The Commission finds that the non-profit corporation's purpose is quasi-governmental in nature in that its sole function is to promote, protect and enhance this one particular nature resource of the State for the use and benefit of the public. Therefore, the requestor's serving as president of the non-profit corporation while it receives funds from and contracts with the state agency does not as such violate the conflict of interest laws.

This finding is based on any contractual interests being public in nature rather than private. The conflict of interest laws are applicable to competing private interests, not the competing interests of governmental or quasi-governmental entities.

Notwithstanding the above, the requestor would violate certain or all of the above cited conflict of interest laws should he receive compensation as an officer or member of the non-profit corporation or should he receive any personal pecuniary benefits from contracts with the non-profit corporation.

Furthermore, the requestor's relatives and/or businesses with which he is associated cannot receive pecuniary benefits from contracts with the non-profit corporation while it is receiving funding from the state agency and state commission.

The requestor is advised 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 board member's vote, the authorization by the member's board nonetheless results in a contract in which the board member has a prohibited interest.
 

Ronald E. Crowe Executive Director