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 3, 2000, basing its approval solely on the facts and circumstances stated herein.

May a broker who is considered an agent of the city by way of an exclusive right-to-sell listing contract be a purchaser, direct or indirect, at any sale made by him in his capacity as an agent of the city?

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:

Code Section 25-4-103(f)(i)(ii), (g)(ii), (h), (n) 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.

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

(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), (3)(a)(b)(c)(d)(e), (4)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j), (5), (6) and (7) 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.

(c) Be a purchaser, direct or indirect, of any claim, certificate, warrant or other security issued by or to be paid out of the treasury of the governmental entity of which he is an officer or employee.

(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.

(e) May purchase securities issued by the governmental entity of which he is an officer or employee if such securities are offered to the general public and are purchased at the same price as such securities are offered to the general public.

(f) May have an interest less than a material financial interest in a business which is a contractor, subcontractor or vendor with any governmental entity.

(g) May contract with the Mississippi Veteran's Home Purchase Board, Mississippi Housing Finance Corporation, or any other state loan program, for the purpose of securing a loan; however, public servants shall not receive favored treatment.

(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.

(i) If a member of the Legislature or other public servant employed on less than a full-time basis, may represent a person or organization for compensation before an authority of the governmental entity other than an authority of the governmental entity of which he is an officer or employee.

(j) If a constable, may be employed and receive compensation as a deputy sheriff of the county for which he serves as constable.

(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.

(6) Any contract made in violation of this section may be declared void by the governing body of the contracting or selling authority of the governmental subdivision or a court of competent jurisdiction and the contractor or subcontractor shall retain or receive only the reasonable value, with no increment for profit or commission, of the property or the services furnished prior to the date of receiving notice that the contract has been voided.

(7) Any person violating the provisions of this section shall be punished as provided for in Sections 25-4-109 and 25-4-111."

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.

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

Code Section 25-4-103(p)(ii) states that a public servant is 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. [Emphasis added to bold text]

A review of the facts and circumstances presented by the requestor, especially the attached exclusive right-to-sell listing contract, support the finding that the broker is an agent of the city for purposes of the state conflict of interest laws.⁽¹⁾

Therefore, the broker as an agent of the city is a public servant of the city and is subject to the prohibitions set out in the above cited Code Section 25-4-105.

Specifically regarding Code Section 25-4-105(3)(b), cited above, the requestor is advised as follows.

Code Section 25-4-105(3)(b) provides that no public servant shall 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. [Emphasis added to bold text]

Therefore, Code Section 25-4-105(3)(b) will prohibit the broker as a public servant of the city from being a purchaser, direct or indirect, at any sale made by him in his official capacity.

In effect, this means that the individual contracting with the city as its broker/agent by way of the attached exclusive right-to-sell listing contract may not purchase from the city the property which the attached exclusive right-to-sell listing contract gives the broker/agent the exclusive right to sell for an on behalf of the city.

Notwithstanding the above, Code Section 25-4-105(3)(b) will not prohibit the broker from being a purchaser from the city at any sale by the city not made by him in his capacity as the city's broker/agent as authorized in the attached exclusive right-to-sell listing contract. The reason this circumstance does not violate Code Section 25-4-105(3)(b) is that the broker is an agent of the city and not an officer or employee of the city. Only individuals who are public servants by way of their positions as officers or employees of a governmental entity are prohibited by Code Section 25-4-105(3)(b) from being purchasers at sales by the governmental entity which they themselves are not making in their official capacities as officers or employees of the governmental entity. [Emphasis added to bold text]
 
 
 
 
 
 
 
 

Ronald E. Crowe

Executive Director

1. A real estate listing creates an agency relationship between the broker and the owner. Charles V. Webster Real Estate v. Richard, 21 Cal. App. 3d 612, 98 Cal. Rptr. 599 (1972); Shoebridge v. Will C. Hartwell Realty and Insurance Company, 244 Miss. 630, 141 So. 2d 558 (1962); Russell v. Johnson, 126 Miss. 896, 89 So. 773 (1921).

Agency relationship. An employment for purpose of representation in establishing legal relations between principal and third persons. [Black's Law Dictionary, Fifth Edition]

Agent. One who represents and acts for another under the contract or relation of agency. [Black's Law Dictionary, Fifth Edition]