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 7, 2003, basing its approval solely on the facts and circumstances stated herein.
 

May a municipality do business with a gas station owned by two sons of one of the city’s aldermen?

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), (f)(i)(ii), (g)(ii), (h), (l), (p)(i)(ii)(iii) and (q) 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.

(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) ‘Government’ 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.

(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.

(q) ‘Relative’ means the spouse, child or parent.”

Code Section 25-4-105(1) and (2) 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.”

Pertinent facts and circumstances provided by the requestor, absent identifying data, are set forth as follows and considered a part of this opinion.
 

As the attorney for the City I have been requested by the Board of Aldermen to write to you for an interpretation of Section 25-4-105.

There is currently a Board member whose 2 sons have purchased a gas station in town.  He has no financial interest in the station.  The City has in the past bought tires, oil changes, ice and minor repair work from the former owner.

The question is can the City purchase these types of items and services from the station owned by an alderman’s sons (sic) under Section 25-4-105.

The Commission formally adopts Advisory Opinion No.03-001-E 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.

The conflict of interest laws do not as such prohibit the city from doing business with the alderman’s sons’ gas station as long as the alderman has no direct or indirect interest in the sons’ gas station’s contract with the city for its services and/or commodities.

Constitutional Section 109 and Code Section 25-4-105(2), both cited above, prohibit a city’s alderman from having an interest, direct or indirect, in any contract authorized by the city board of aldermen during his term or for one year thereafter.

Therefore, Constitutional Section 109 and Code Section 25-4-105(2) would prohibit the city contracting with the alderman’s sons’ gas station if the alderman is directly or indirectly interested in the city’s contracts with the service station.  In order for the alderman to avoid a violation of Constitutional Section 109 and Code Section 25-4-105(2), the alderman’s sons must be totally and completely financially independent from the alderman and the alderman must have no interest, direct or indirect, in the sons’ gas station’s contracts with the city.

If the sons should live in the alderman’s household or receive other financial assistance from the alderman such as the alderman assisting them in their purchase of the gas station, then the sons would be financially dependent on the alderman and the gas station would be prohibited from doing any business with the city.

The following are some examples that could result in the alderman having an interest, direct or indirect, in his sons’ gas station’s contracts with the city. The sons lease or rent the property from the alderman; the sons are debtors of the alderman; the sons live on property owned by the alderman; or, the sons co-owned a business with the alderman.  The above examples should not be considered a complete list of circumstances that could result in the alderman having an interest in the sons’ gas station’s contracts with the city.
 

Notwithstanding the above, if the facts and circumstances are sufficient to show that the alderman would not have an interest, direct or indirect, in his sons’ gas station’s contracts with the city that would violate Constitutional Section 109 and Code Section 25-4-105(2), then the alderman must still remain keenly aware of Code Section 25-4-105(1) and Code Section 25-4-101.

Code Section 25-4-105(1), cited above, prohibits an alderman from using his position to obtain a pecuniary benefit for his child or a business with which he is associated.

Therefore, the alderman may not in any way be involved in the city’s decision to purchase from or pay the claims of his financially independent sons’ gas station.

To avoid using his official position to obtain a pecuniary benefit for his child, the alderman must totally and completely recuse himself from all subject matters providing a pecuniary benefit to his sons.

An abstention is a vote with the majority of the board and does not qualify as a recusal.

A total and complete recusal requires a 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 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 to properly recuse oneself from a matter, a 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 alderman 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.

The issue presented by the requestor also 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.
 

Clearly, the city’s contracting with the gas station owned by the alderman’s sons has the potential of creating suspicion among the public and reflecting unfavorably upon the city.

Therefore, this is another reason why the alderman must totally and completely recuse himself from all discussions, actions and decisions concerning  the city’s purchases from the sons’ gas station.
 

Scott Rankin
Executive Director