This Advisory Opinion concerns the following issues as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on May 15, 1998, basing its approval solely on the facts and circumstances stated herein.

ISSUE 1. May the city appoint an insurance agent to the zoning board and still purchase insurance from that agent based upon proposals for insurance, in accordance with the purchasing laws, his being the lowest proposal?

ISSUE 2. May the city contract with an accounting firm to do an audit for the city based upon proposals if the accounting firm has a partner whose spouse is a member of the zoning board?

ISSUE 3. May the city contract with an architect to design a new fire station who is presently on the board of architectural review or has been on the board of architectural review within the past year?

ISSUE 4. May the city award a contract for construction in accordance with the purchasing laws to a corporation partly owned by the son of a member of the board of architectural review?

ISSUE 5. Are members of the convention center advisory committee deemed to be "public servants" if they merely make recommendations to the governing officials, do not receive any compensation or make any decision whatsoever?

ISSUE 6. May the city appoint the owner of a tugboat business to the harbor commission when the city pays a dock fee to the tugboat business to store the city's boat?

ISSUE 7. May the members of the city and county convention and visitors bureau be contractors and vendors with the city?

ISSUE 8. May the members of the board of directors of a 501(c)(3) corporation that is in partnership with the city to operate a heritage center be contractors and vendors with the city when the city's governing authority appoints the members of the board of directors?

ISSUE 9. May the board members of the city housing authority be contractors and vendors with the city?

ISSUE 10. May the city lease parking space from the son of a board member of the city housing authority?

ISSUE 11. May an employee of a city department be appointed as a board member of a city board?

ISSUE 12. May a board member appointed to a city board, commission or authority resign his or her public position and within one year of said resignation contract with the city's governing authority?

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 (a), (b), (c), (d), (e), (f)(i)(ii), (g)(ii)(v), (h), (i), (k)(i)(ii)(iii)(iv), (l), (m), (n), (o), (p)(i)(ii)(iii) and (q) states:

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

(b) 'Benefit' means any gain or advantage to the beneficiary, including any gain or advantage to a third person pursuant to the desire or consent of the beneficiary.

(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 nonprofit 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 funds.

(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.

(i) 'Income' means money or thing of value received, or to be received, from any source derived, including but not limited to, any salary, wage, advance, payment, dividend, interest, rent, forgiveness of debt, fee, royalty, commission or any combination thereof.

(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);

(iii) The income as an employee of a relative if neither the public servant or relative is an officer, director or partner in the business and any ownership interest would not be deemed material pursuant to subparagraph (i) or (ii) herein; or

(iv) The income of the spouse of a public servant when such spouse is a contractor, subcontractor or vendor with the governmental entity that employs the public servant and the public servant exercises no control, direct or indirect, over the contract between the spouse and such governmental entity.

(l) '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.

(n) 'Property' means all real or personal property.

(o) 'Public funds' means money belonging to the government.

(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), (3)(a)(b)(d)(e), (4)(a)(b)(c)(d)(h) 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.

(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.

(b) Be a purchaser, direct or indirect, at any sale made by him in his official capacity or by the governmental entity of which he is an officer or employee, except in respect of the sale of goods or services when provided as public utilities or offered to the general public on a uniform price schedule.

(d) Perform any service for any compensation during his term of office or employment by which he attempts to influence a decision of the authority of the governmental entity of which he is a member.

(e) Perform any service for any compensation for any person or business after termination of his office or employment in relation to any case, decision, proceeding or application with respect to which he was directly concerned or in which he personally participated during the period of his service or employment.

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

(a) May be an officer or stockholder of banks or savings and loan associations or other such financial institutions bidding for bonds, notes or other evidences of debt or for the privilege of keeping as depositories the public funds of a governmental entity thereof or the editor or employee of any newspaper in which legal notices are required to be published in respect to the publication of said legal notices.

(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 is 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 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, services or property 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.

(d) May be a contractor, subcontractor or vendor with any 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 contractor, subcontractor or vendor with any authority of the governmental entity of which he is a member, officer, employee or agent: (i) 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; or (ii) where the contractual relationship involves the further research, development, testing, promotion or merchandising of an intellectual property created by the public servant.

(h) May be employed by or receive compensation from an authority of the governmental entity other than the authority of the governmental entity of which the public servant is an officer or employee.

(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 in the form of the requestor's letter, absent identifying data, are attached hereto and considered a part of this opinion.

The Commission formally adopts Advisory Opinions No. 92-149-E, No. 93-032-E, No. 96-026-E, No. 96-034-E, and No. 97-149-E in response to this request and by attachment incorporates them into this opinion.

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

ISSUE 1. In response to this question, the requestor is referred to the attached Advisory Opinion No. 93-032-E. Specifically, the opinion in response to Question 3 provides, "As a member of the city's planning and zoning commission, the requestor would be a "public servant" of the city. As a public servant he would be prohibited by Code Section 25-4-105 (3)(a) [cited above] from having a material financial interest in any business which is a contractor [or vendor] with the city."

ISSUE 2. Code Section 25-4-103 (k)(iv), cited above, provides an exception to a public servant having a material financial interest in a business that is a contractor or vendor with the public servant's governmental entity. The exception provides that there is no material financial interest when the public servant's spouse's income is from a contractor, subcontractor or vendor with the governmental entity that employs the public servant and the public servant exercises no control, direct or indirect, over the contract between the spouse and such governmental entity.

Therefore, there is not violation of Code Section 25-4-105 (3)(a) if the zoning board member exercises no control, direct or indirect, over the city's contract with the accounting firm employing the zoning board member's spouse.

ISSUE 3. In response to this question, the requestor is referred to the attached Advisory Opinion No. 97-149-E. The board of architectural review appears from the information provided to be an advisory board to the city's governing authority similar to those boards addressed in the attached opinion. The attached opinion provides:

"The advisory board members addressed in the requestor's letter are public servants of the city under the definitions sets forth in the above cited Code Section 25-4-103 (p)(i)(ii). They are appointed officials of the city government and they are officers and agents setting on boards that are created by city ordinances and that are funded by city funds.

The advisory board members are "public servants" of the city and therefore are prohibited from being contractors, subcontractors or vendors with the city or from having material financial interests in any businesses that are contractors, subcontractors or vendors with the city. Such relationships with the city violate the above cited Code Section 25-4-105 (3)(a).

The advisory boards addressed in this request are within the same authority of the city government as the mayor and city council. They are created and funded by the city governing authority. Also, they are solely established to advise the city governing authority on matters directly under the city governing authority's purview.

Therefore, the only exception applicable to the advisory board members or their businesses being contractors, subcontractors or vendors with the city is found in the above cited Code Section 25-4-105 (4)(d). Specifically, the only way the civil service commissioner or the advisory board members or their businesses could provide goods or services to the city would be 'where such goods or services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchasing laws.' The application of Code Section 25-4-105 (4)(d) clearly depends on the facts and circumstances of each particular case."

The prohibition set forth in Code Section 25-4-105 (3)(a) is applicable while the architectural board member is serving in that public position but is not applicable immediately after he resigns from that public position.

ISSUE 4. It is not as such a violation of the state conflict of interest laws for the city to award a construction contract to the son of a member of the city's board of architectural review.

Notwithstanding the above, the requestor is cautioned to advise the architectural review board member to not use his official position to obtain the construction contract for the son as such an action would violate the above cited Code Section 25-4-105 (1).

ISSUE 5. In response to this question, the requestor is referred to the attached Advisory Opinion No. 97-149-E. The convention center advisory committee appears from the information provided to be an advisory board to the city's governing authority similar to those boards addressed in the attached opinion.

Therefore, the requestor is referred to the response to ISSUE 3 set forth above.

ISSUE 6. If the city harbor commission is advisory in nature, then the requestor is referred to the attached Advisory Opinion No. 97-149-E and the responses set forth in ISSUE 3 and ISSUE 5 .

If the city harbor commission is similar in its organization and authority to a county port commission, then the requestor is referred to the attached Advisory Opinion No. 96-026-E. The attached opinion provides:

"Even though the port commission makes recommendations to the county board of supervisors concerning the port's operation and the port's budget, the State laws still give the port commission broad decision making authority once the budget is approved. This includes, but it not limited to, employing personnel, carrying out projects once approved in the budget and owning certain facilities. Furthermore, the port commissioners are appointed for a four (4) year term and take an oath of office. These elements are sufficient to conclude that the port commission is a separate authority from the county board of supervisors.

Based on the above, this Commission finds that the port commissioner as a public servant of the county and as chairman of the board of the bank would be in violation of Code Section 25-4-105 (3)(a) should the county board of supervisors contract with his bank to keeps its funds on deposit, including investing in certificates of deposit. However since the port commission is a separate authority of the county board of supervisors, there would not be a violation if the county board of supervisors let the contract to the bank as the lowest and best bidder after competitive bidding and three (3) or more legitimate bids were received as allowed by Code Section 25-4-105 (4)(b)."

In addition, Code Section 25-4-105 (4)(b) provides another exception to a violation of Code Section 25-4-105 (3)(a). This second exception is where the goods, services or property involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws. The application of this exception would require a review of the individual facts and circumstances of each specific instance.

ISSUE 7. The requestor is referred to the attached Advisory Opinion No. 92-149-E if the convention and visitors bureau is involved in the contract authorization process.

As set forth in the attached opinion, Constitutional Section 109 and Code Section 25-4-105 (2), cited above, prohibit a convention and visitors bureau member from contracting with the city, such as in the sell of land, if the convention and visitors bureau's order is required for the city to purchase the land.

The prohibitions set forth in Constitutional Section 109 and Code Section 25-4-105 (2) are for the period of the term of the board member and for one year thereafter.

If the contract between the convention and visitors bureau member and the city's governing entity does not involve an authorization by the convention and visitors bureau, then the requestor is referred to the response in ISSUE 6 relating to the attached Advisory Opinion No. 96-026-E.

Either of the above situations would apply the same to all members of the convention and visitors bureau regardless of the appointing entity.

ISSUE 8. The members of the board of directors of the heritage center are appointed by the city's governing entity. The heritage center, itself, appears from the facts presented to have been created by the city and is certainly partly funded by the city. Therefore based on Code Section 25-4-103 (p)(i)(ii), the members of the board of directors of the heritage center appear to be public servants of the city for purposes of the state conflict of interest laws.

Regarding the question of the heritage center's board members contracting with the city, the requestor is referred to the response in ISSUE 6 . Depending on the relationship of the heritage center to the city's governing entity, either the findings in the attached Advisory Opinion No. 97-149-E or Advisory Opinion No. 96-026-E will control.

ISSUE 9. In response to this question, the requestor is referred to the attached Advisory Opinion No. 96-034-E. The attached opinion provides:

"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 25-4-105 (3)(a) 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 25-4-105 (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."

A housing authority board member, like the alderman being a contractor, subcontractor or vendor with the housing authority in the above referenced opinion, would be prohibited from being a contractor, subcontractor or vendor with the city subject to the same exceptions discussed above.

ISSUE 10. It is not as such a violation of the state conflict of interest laws for the city to lease parking space from the son of a member of the city housing authority.

Notwithstanding the above, the requestor is cautioned to advise the housing authority board member to not use his official position to obtain the parking space lease for the son as such an action would violate the above cited Code Section 25-4-105 (1).

ISSUE 11. Different departments of a city would not be deemed separate authorities of the city for purposes of the state conflict of interest laws.

The requestor is advised to study each of the attached opinions as they discuss boards or commissions that have been established by cities. Depending on the circumstances and the establishing authority, some are within the authority of the city governmental entity establishing them and some are considered separate authorities of the city.

For example, a person employed by a city recreation department [commission] may or may not be available for appointment to the city's zoning board. It would depend on the nature of the department and whether or not it is control by a park commission or an advisory park and recreation commission.

Code Section 21-37-33, 1972 Mississippi Code Annotated, provides for both a park commission and an advisory park and recreation commission. A park commission has such powers and authorities that it would be considered a separate authority of the city from its members' appointing city entity and therefore the park commission's employees could be employed and compensated by other city authorities as authorized by Code Section 25-4-105 (4)(h), cited above.

However in your other example, the architectural review board member could not be an employee of the city fire department as both or within the authority of the general city governmental entity.

ISSUE 12. A governmental contract prohibited by Constitutional Section 109 and Code Section 25-4-105 (2) may not be authorized by the governmental body during the term and for one year after the term of the governmental body's member having the direct or indirect interest.

However, A contractual or vendor relationship prohibited by Code Section 25-4-105 (3)(a) may be immediately avoided by the resignation of the public servant from his or her public position.

Therefore, those members on the above described boards determined to be prohibited only by Code Section 25-4-105 (3)(a) from being a contractor or vendor with the city may resign their positions on their respective boards and immediately thereafter become a contractor or vendor with the city.

In addition to Code Section 25-4-105 (3)(a), the requestor is cautioned to advise all the city's public servants serving on the various boards to remain keenly aware of the above cited Constitutional Section 109 and Code Section 25-4-105 (1), (2), (3)(b)(d)(e) and (5).

The issues presented by the requestor also must be viewed as they relate to Code Section 25-4-101, set forth above. This code section sets the tone for the conflict of interest laws as 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.
 
 
 
 

Ronald E. Crowe

Executive Director