This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on November 1, 1996, basing its approval solely on the facts and circumstances stated herein.

May a hardware store managed by an individual and owned by the individual's father continue to do business with the city after the individual is elected and sworn in as the city's alderman?

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(f)(i)(ii), (g)(ii), (h), (k)(i)(ii) and (p)(i)(ii)(iii) states:

"(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:

(ii) Municipalities.

(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).

(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(2) and (3)(a) states:

"(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."

The Commission formally adopts Advisory Opinion No. 89-106-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.

Constitutional Section 109 and Code Section 25-4-105(2), both cited above, prohibit a hardware store managed by an individual and owned by the individual's father from doing business with the city the individual serves as an alderman. The hardware store employing the alderman is effectively prohibited from doing business with the city during the alderman's term and for one (1) year thereafter. [Emphasis Added]

The above complies with the Mississippi Supreme Court's decision in Frazier v. State, 504 So.2d 675 (Miss. 1987). The Court stated, "First, it is clear [Section 109] is to protect the government. It is not a provision to protect individual rights. It is not concerned with whether some individual or class of individuals may suffer from its enforcement. As noted in Noxubee County Hardware Co.1 supra; the transgression test is intended to be mechanistic and objective, and motives and intentions of persons who violate it are immaterial. Its purpose is to remove any temptation to invade its proscription. . . It is also a self-executing section, and more specific than many, perhaps most, constitutional provisions. It prohibits an individual having an interest in a contract when he as a public officer served on the official body which enabled the contract to come into being. It is that simple. Being self-executing, its provisions cannot be modified or encroached upon by the Legislature."

'Noxubee County Hardware Co. v. City of Macon, (90 Miss. 636): The State Supreme Court reversed and remanded a Chancery Court decree and held that Constitutional Section 109 prohibited both, a City of Macon alderman and a hardware company that another City of Macon Alderman served as secretary, from making sales to the City of Macon's utility plant.
Furthermore, Code Section 25-4-105(3)(a), cited above, would prohibit the alderman from having a material financial interest in a business that is a vendor with the city during the alderman's term of office. A material financial interest is defined in the above cited Code Section 25-4-103(k)(i)(ii).

The requestor is cautioned to advise the alderman that a recusal or an abstention will not prevent a violation of Constitutional Section 109 and Code Section 25-4-105(2) and (3)(a). Even without a 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