May 3, 2002
This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on May 3, 2002, basing its approval solely on the facts and circumstances stated herein.
May a regional housing authority contract for security services with businesses controlled by individuals who serve as constable, deputy sheriff, city police officer or a member of another city housing 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:
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),
(c), (d), (f)(i)(ii), (g)(i)(ii)(v), (h), (k)(i)(ii), (l) and (p)(i)(ii)(iii)
states:
“(a) ‘Authority’ means any component unit of a governmental entity.(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, anonprofit 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.
(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;(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.(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),
(3)(a), (4)(b) and (4)(j) 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.(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 thegovernmental 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, services or property involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.(j) If a constable, may be employed and receive compensation as a deputy sheriff or other employee of the county for which he serves as constable.”
Pertinent facts and circumstances provided by the requestor, absent
identifying data, are set forth as follows and considered a part of this
opinion.
The undersigned represents a Regional Housing Authority, a regional public housing authority organized and existing under and by virtue of the laws of the State of Mississippi.The governing body of the Regional Housing Authority is its Board of Commissioners.The Board is comprised of one member from each of the counties served by the Regional Housing Authority (appointed by the Board of supervisors of that county) and one at-large member.We request your opinion regarding certain ethics issues that have arisen by virtue of the solicitation by Regional Housing Authority of bids for provision of security services at various of the housing complexes operated by the Regional Housing Authority.
Bids were solicited by the Regional Housing Authority for provision of security services.Three bidders submitted bids.One bid was submitted by a Security Agency.It is the understanding of the Regional Housing Authority that the principles of the Security Agency are a Constable of a County and a Chief Deputy of the same county sheriff’s department.Another bid was submitted by a Protection Agency.It is the understanding of the Regional Housing Authority that the principles of the Protection Agency are a City police officer and an employee of the same City’s Housing Authority.The Board of Directors for the City Housing Authority is appointed by the City Board of Aldermen.The security services sought involve providing security to numerous locations, including locations in 5 counties with the possibility of adding services in the future in another county.
We have reviewed various of the provisions of the Ethics in Government Law.It is our understanding that the law typically prevents a public servant from being a contractor with a governmental entity of which he is a member, or having a material financial interest in any business which is a contractor with the governmental entity of which he is a member.Section 25-4-105(3)(a) Mississippi Code (1972, as amended).We are further aware that the Ethics in Government Law permits a public servant to be a contractor with any authority of the governmental entity other than the authority of the governmental entity of which he is a member.Section 25-4-105(4)(b) Mississippi Code (1972, as amended).We are also aware of the provisions of Section 15-4-105(4)(j) Mississippi Code (1972, as amended) which pertain to constables which is pertinent to one of the principles of one of the bidders hereinabove.
Prior to awarding the contract to either of the bidders mentioned hereinabove, the Regional Housing Authority wishes to be sure that no ethical issues or problems will be created.
If the Regional Housing Authority selects the bid of either the Security Agency or the Protection Agency will there be an ethics violation?
The Commission formally adopts Advisory Opinions No. 97-054-E and No. 96-034-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.
As set forth in the attached opinions, Sections 44-33-1 et seq., 1972 Mississippi Code Annotated (amended), provide that a housing authority is a public body corporate and politic and is given its independent powers once it has been established by its governmental entities.Therefore, a housing authority must be considered a separate governmental authority from its establishing governmental entities, in this case the establishing counties, based on Code Sections 44-33-1 et seq.
Code Section 25-4-105(3)(a), cited above, prohibits a business in which a public servant has a material financial interest from being a contractor, subcontractor or vendor with his governmental entity of which he is a member, officer, employee or agent.Code Section 25-4-105(3)(a) would apply only to the business of the constable and deputy sheriff since they are employees of the establishing governmental entities, i.e., the counties establishing the regional housing authority.
For purposes of this opinion, a “material financial interest” is defined in the above cited Code Section 25-4-103(k)(i)(ii).
However, there is an exception to the prohibition set forth in Code Section 25-4-105(3)(a)when a business with which the public servant has a material financial interest is contracting with an authority of the governmental entity other than the one served by the public servant.The exception is set forth in the above cited Code Section 25-4-105(4)(b).[Emphasis added]
Code Section 25-4-105(4)(b) would allow the business of the constable and deputy sheriff to be a contractor with the regional housing authority, as it is a separate authority from the county they serve, if the security services contract is let to their business as the lowest and best bidder after competitive bidding and three (3) or more legitimate bids are received or where the security services involved are reasonably available from two (2) or fewer commercial sources, provided such transactions comply with the public purchases laws.
The exception set forth in the above cited Code Section 25-4-105(4)(b) does not limit a good or service, “reasonably available from two (2) or fewer commercial sources,” to a specific geographical area such as a county or surrounding counties.Security services within the surrounding counties clearly would be considered as reasonably available commercial sources.
It is the Commission’s opinion that it is very unlikely the security services will meet the exception of “reasonably available from two (2) or fewer commercial sources.”
The prohibition set forth in Code Section 25-4-105(3)(a) does not apply to the security business owned by the city police officer and the city housing authority employee since these individuals work for governmental entities totally separate from the governmental entities which established the regional housing authority.
Therefore, a regional housing authority may contract for security services with a business controlled by individuals who serve as a city police officer or a city housing authority employee without violating the state’s conflict of interest laws.
The requestor is cautioned to advise the public servants, especially the law enforcement officers, that if their businesses are allowed to contract for security services with the regional housing authority, they must remain keenly aware of the above cited Code Section 25-4-105(1) and Code Section 25-4-101.
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.
The requestor should advise the contractors that they will be in violation of Code Section 25-4-105(1) should they use their law enforcement powers or their employing governmental entities’ equipment, facilities or other resources to provide security services to the regional housing authority.Specifically, the contractors may not use county or city owned cars, guns, uniforms, other equipment and resources, including personnel working on county or city time, to provide private security services that were paid for by the governmental entity that otherwise employs these individuals.Also, the contractors will violate Code Section 25-4-105(1) should they provide the security services when they are not on leave or off duty from their government employment positions.
Code Section 25-4-101 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.
Clearly, public servants, especially local law enforcement officers with law enforcement powers and responsibilities for areas including the regional housing authority, contracting with a regional housing authority to provide security services is a circumstance that has the potential of creating suspicion among the public and reflecting unfavorably upon both the regional housing authority and thegovernmental entities employing the public servants in question.Therefore, the regional housing authority and the security contractors, especially those who are law enforcement officers, must take steps to insure that the conflict of interest laws are followed.This includesbusinesses controlled by public servants who are law enforcement personnel possessing policies and procedures that ensure government equipment and resources are not used to perform security services and that employees, otherwise employed by government agencies, do not perform security services while working on the government agencies’ time.The regional housing authority has the responsibility to monitor businesses controlled by public servants who are law enforcement personnel and to report to the proper authorities if government equipment, resources or personnel are used to perform their security services.
Scott Rankin
Executive Director