May a member of the board of aldermen be a contractor or subcontractor with the housing authority for the municipality he serves as an 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 (a), (d), (f)(i)(ii), (g)(ii)(v), (h), (1) and (p)(i) states:

"(a) 'Authority' means any component unit of a governmental entity.

(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.

(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:

(ii) Municipalities; 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.

(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." Code Section 25-4-105 (1), (2), (3)(a), (4)(b) and(4)(c) 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.

(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.

(4) Notwithstanding the provisions of subsection (3) of this section, a public servant or his relative:

(b) May be a contractor or vendor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which he is a member, officer, employee or agent where such contract is let to the lowest and best bidder after competitive bidding and three (3) or more legitimate bids are received or where the goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.

(c) May be a subcontractor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member, officer, employee or agent or have a material financial interest in a business which is a subcontractor with any authority of the governmental entity of which he is a member, officer, employee or agent where the primary contract is let to the lowest and best bidder after competitive bidding or where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws."

    I enclose a copy of an opinion dated 5 October, 1984 [Advisory Opinion No.84-23-
E] that you gave a city. Has there been any change in the laws since that time? There
is only one plumbing contractor in our City and he is a member of the Board of
Aldermen.

    The Commission formally adopts Advisory Opinion No. 84-23-E in response to this request and by attachment incorporates it into this opinion as it is referenced in the requestor' 5 letter.

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

    This opinion is written with the understanding that the housing authority receives no funding and no additional bonding authority from the mayor and board of aldermen nor is any action required by the mayor and board of aldermen relating to the project(s) on which the alderman would be the plumbing contractor or subcontractor. The Commission should be immediately notified if this understanding is not correct so that this opinion may be appropriately modified as such funding or action on the part of the mayor and board of aldermen would result in the alderman having a prohibited interest in any plumbing contracts with the housing authority in violation of the above cited Constitutional Section 109 and Code Section 25-4-105 (2).

    The Commission has consistently held that a housing authority is a separate authority from its establishing governmental entity. This finding is based on Sections 44-33-1 et seq., 1972 Mississippi Code Annotated, which establishes a housing authority as a public body corporate and politic and gives it independent powers once it has been established by its governmental entity.

    Therefore, the alderman's plumbing contract or subcontract is not prohibited by Constitutional Section 109 and Code Section 25-4-105 (2) as the plumbing contracts or subcontracts would be authorized by the housing authority board and not the mayor and board of aldermen.

    Notwithstanding the above, the prohibitions set forth in Code Section 25-4-105 (3)(a), cited above, are applicable to the issue presented herein.

    Code Section 25-4-l05 prohibits the alderman from being a contractor or subcontractor with his governmental entity. The governmental entity includes all the authorities of a municipality.

    However, there are exceptions to the prohibitions set forth in Code Section 25-4-1 05(3)(a) when the public servant is contracting or subcontracting with an authority of the governmental entity other than the one served by the public servant. These exceptions are set forth in the above cited Code Section 25-4-105 (4)(b) and (4)(c). Code Section 25-4-105 (4)(b) applies to a public servant that is a contractor with an authority of his or her governmental entity other than the authority of the governmental entity of which he or she is an officer or employee. Code Section 25-4-105 (4)(c) applies to a public servant that is a subcontractor with an authority of his or her governmental entity other than the authority of the governmental entity of which he or she is an officer or employee. [Emphasis added]
 

    Code Section 25-4-105 (4)(b) would allow the alderman to be a contractor with the housing authority, as it is a separate authority from the mayor and board of aldermen, if the contract is let to the lowest and best bidder after competitive bidding and three (3) or more legitimate bids are received or where the goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws. [Emphasis added]

    Code Section 25-4-105 (4)(c) would allow the alderman to be a subcontractor with the housing authority, as it is a separate authority from the mayor and board of aldermen, if the contract is let to the lowest and best bidder after competitive bidding or where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws. [Emphasis added]

    The exception set forth in the above cited Code Section 25-4-105 (4)(b)(c) does not limit a good or service "reasonably available from two (2) or fewer commercial sources" to a specific geographical area such as a municipality. Plumbing contractors within the county and in adjourning counties clearly would be considered as reasonably available commercial sources.

    The requestor is cautioned to advise the alderman to also be keenly aware of the above cited Code Section 25-4-105 (1).

    Code Section 25-4-105 (1) 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, the public servants must totally and completely recuse themselves from subject matters providing the pecuniary interests. An abstention is a vote with the majority of the governing entity's board and therefore does not qualify as a recusal.

    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 other 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 in order 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.

    The requestor is cautioned to advise the board member that a recusal or an abstention will not prevent a violation of Constitutional Section 109 or Code Section 25-4-105 (2). 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