This Advisory Opinion concerns the following issue as formulated from facts and/or circumstances furnished by a requestor. The Commission approved this opinion on  July 22, 2005, basing its approval solely on the facts and circumstances stated herein.

 
May an alderman who has a business relationship with the municipal separate school district vote on an appointment to the school board?

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 25-4-103(d), (k), (l) and (p)(i)(ii)(iii) states:
 

“(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.

(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.

(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) 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.

(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.
 

Our five person Aldermen board for the City is presently contemplating appointing a school board member.

I had received through the mayor’s representative a request dated July 7, 2005, from a new alderlady on our board.
In it, she had requested whether or not each of the following could participate in the appointment:

Alderman 1 is a employee (cafeteria worker) of the school;
Alderman 2 has a spouse that is an employee (secretary) of the school;
Alderman 3 has a spouse that is an employee (teacher) of the school;
Alderman 4 has a son that is an employee (teacher/coach) of the school.

Before our meeting Tuesday night, the Mayor asked me whether our alderman that does have a wife employed as a secretary of the school can vote if he also is employed at a building supply business wherein he owns a percentage of that entity that does business with the school district.

As such, I seek clarification of Official Advisory Opinion No. 97-034-E.

The Commission formally adopts Advisory Opinion No. 05-070-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.

Section 109, Miss. Const. of 1890, and its statutory parallel, Section 25-4-105(2), Miss. Code of 1972, both quoted above, prohibit a member of a public board from having any direct or indirect interest in a contract with the government authorized by that board during his or her term or for one year thereafter. Frazier v. State, ex rel. Pittman, 504 So.2d 675, 693 (Miss. 1987). While the board of aldermen does approve the budget for the municipal separate school district, the board of aldermen would not be in any way authorizing a contract between the school board and the alderman’s business. Since the passage of the Uniform School Law of 1986, the levying authority of the board of aldermen for school purposes is now a mandatory action and not a discretionary one. Thus, an alderman is not necessarily prohibited from having an interest in a contract with the municipal school district. See Frazier at 701.

In addition, Section 25-4-105(1), Miss. Code of 1972, also quoted above, prohibits an alderman from using his position to obtain pecuniary benefit for a business with which he is associated. While the business in question may very well be one with which the alderman is associated as defined in Section 25-4-103(d) above, that business will not benefit financially from an appointment to the school board unless the alderman enters into a quid pro quo agreement with the appointee. For instance, if an alderman agrees to support the appointment of an individual to the school board in exchange for increased patronage of the alderman’s business by the school, then that alderman would have violated Section 25-4-105(1). See Op. Miss. Ethics Commn. No. 05-070-E issued contemporaneously herewith. However, an alderman who has a business relationship with the municipal separate school district will not violate Section 25-4-105(1) by simply voting on an appointment to the school board, absent some illegal agreement. Op. Miss. Ethics Commn. No. 97-034-E is hereby modified to conform herewith.

The alderman’s spouse who is an employee of the school district should also be aware of Section 25-4-105(3)(a), Miss. Code of 1972, also quoted above. That paragraph will prohibit the school employee from having a “material financial interest” in a business which is a contractor, subcontractor or vendor to the school district. Pursuant to the statutory definition found in Section 25-4-103(k)(iv), the school employee does not have a material financial interest in the building supply business if the income derived by that business from the school district is solely that of her spouse, the alderman, and if she exercises no control, direct or indirect, over the contract between the building supply business and the school district. As a secretary she would presumably have no control over such a contract and thus no violation.
 

Scott Rankin
Executive Director