This Advisory Opinion concerns the following issues as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on October 1, 1999, basing its approval solely on the facts and circumstances stated herein.

ISSUE 1. May a city council member be employed at a casino owned by a gaming corporation that has a rental agreement with the city?

ISSUE 2. May a city council member be employed at a casino located in the council member's city and owned by a gaming corporation that has no contracts, rental agreements or otherwise, with the city?

ISSUE 3. May a city council member be employed at a casino located outside the council member's city?

ISSUE 4. May a city council member be employed at a county tax collector's office when the council member's city has an interlocal agreement with the county tax collector's office to collect city taxes?

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), (d), (e), (f)(i)(ii), (g)(i)(ii), (h), (i), (k)(i)(ii), (l) 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 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:

(i) Counties; and

(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.

(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).

(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.

(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 (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.

I am a City Councilman. Some of the other Councilmen have had discussions in the past with regard to the possible employment at the casinos here in our area.

We feel it would be a conflict of interest if any of us were to be employed at the Casino since we have a rental agreement with the facility.

We would like to know if a City Councilman could be employed at the casinos in our City. If there were a conflict with employment with a casino in our City, would there be a conflict with employment at a casino in another City in the area.

The second question about employment is this. Can a City Councilman accept employment in the County Tax Collector office. As you might know, the cities have an interlocal agreement with the County Tax Collector's office whereby the County collects the taxes for the cities and remits them to the cities.

The Commission formally adopts Advisory Opinion No. 97-056-E, with attachments, 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.

ISSUE 1. A rental agreement is a contract for purposes of Constitutional Section 109 and Code Section 25-4-105 (2), both cited above. When a city council authorizes a rental agreement during a city council member's term, or within one year of the end of said term, then the city council member is in violation of Constitutional Section 109 and Code Section 25-4-105 (2) if the city council member has a prohibited interest in the rental agreement brought about by the council member being an employee at a casino owned by the gaming corporation.

Therefore in such a circumstance, Constitutional Section 109 and Code Section 25-4-105 (2) absolutely prohibit a city council member from being employed at a casino owned by a gaming corporation that has a rental agreement with the city.

In addition to the council member violating Constitutional Section 109 and Code Section 25-4-105 (2), the council member will also be in violation of Code Section 25-4-105 (3)(a), cited above, if the council member is an employee at a casino owned by a gaming corporation that has a rental agreement with the city if the casino employment results in the council member having a material financial interest in the gaming corporation as defined in the above cited Code Section 25-4-103 (k)(ii). Code Section 25-4-105 (3)(a) provides the public servant has a material financial interest in a business if the public servant's aggregate annual net income is $5,000.00, or more, and the public servant ownership interest is less than two percent.

In the circumstance addressed above, a city council member will be in violation of Constitutional Section 109 and Code Section 25-4-105 (2) and (3)(a) regardless of whether the council member is employed at a casino owned by the gaming corporation that is located in the council member's city or another city. The violations occur due to a council member's prohibited interest in the gaming corporation brought about by his or her employment status and not by the site location of his or her employment.

The requestor and the other council members are advised that a recusal or an abstention will not prevent a violation of Constitutional Section 109 and Code Section 25-4-105 (2) or (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.

ISSUE 2. Regarding a city council member being employed at a casino located in the council member's city and owned by a gaming corporation that has no contracts, rental agreements or otherwise, with the city, the requestor and the other council members are advised that serious ethical and public trust issues still exist, even though there are currently no contracts between the city and the gaming corporation.

First, Code Section 25-4-105 (1), cited above, would prohibit a city council member from participating in any matter concerning his gaming employer or its facilities that might come before the city council when such participation could be construed as providing a pecuniary benefit to the gaming employer. The reason being the gaming corporation is a business with which the council member is interested due to his or her gaming employment.

Also, the issue presented by the requestor 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 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.

Because of the nature of the gaming industry, gaming facilities operating within the boundaries of a governmental entity, such as a city, require continuous involvement between the governmental entity and the gaming operations. These involvements encompass, but certainly are not limited to, revenue generation, traffic logistics, lease agreements, zoning matters and quality of life issues.

A city council member's employment in the gaming industry within his or her city's boundaries and the restrictions placed on the council member's involvement in city council matters and on the city contracting with gaming facilities due to such employment raise serious public policy and public trust concerns.

Accordingly, it is clear that the interests of the city and the gaming operations will not always be the same.

Therefore, Code Section 25-4-101 precludes a city council member from being employed at a casino located in the council member's city, though owned by a gaming corporation that has no contracts with the city, as such employment is contrary to public policy and conflicts with the public trust obligations required of a council member.

ISSUE 3. The state conflict of interest laws do not preclude a city council member from being employed at a casino if the following is true. The casino itself is not located in the council member's city and the gaming corporation that owns and/or operates the casino does not own, operate, or have any other direct or indirect interest in any other casinos, gaming operations or facilities located with the city the council member serves. Also, the council member's city must not have any other relationships with the gaming corporation including, but not limited to, the receipt of revenues and/or contractual arrangements.

ISSUE 4. First, the conflict of interest laws do not as such prohibit a member of one governmental entity from being employed by a totally separate governmental entity.

However, as set forth in the attached opinions, a circumstance can exist that would cause a violation of the conflict of interest laws should a member of one governmental entity be employed by another governmental entity.

That circumstance involves the existence of contracts between the two governmental entities, in this case the City and County, in which the public servant, as a salaried county deputy tax collector and city council member, would have a private pecuniary interest.

In this instance, the Commission finds that the existing contract, the interlocal agreement for tax collections, is sufficient to cause a conflict of interest to occur.

Therefore, a county deputy tax collector serving as a city council member would be prohibited by Constitutional Section 109 and Code Section 25-4-105 (2), both cited above, if the interlocal agreement was entered into during the council member's term, is renewed during the council member's term and/or if payments under the agreement are made or continued during the council member's term. Also, the same prohibitions that apply during the council member's term apply within one year after the council member's term ends.

The requestor and the other council members are again advised that a recusal or an abstention will not prevent a violation of Constitutional Section 109 and Code Section 25-4-105 (2). 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