Published: Thu, May 17, 2018
Industry | By Jeannie Evans

Top Novartis lawyer steps down over Michael Cohen payments

Top Novartis lawyer steps down over Michael Cohen payments

The $100,000-per-month contract between Novartis and Cohen's Essential Consultants was approved under former chief executive Joe Jimenez in 2017 as a bid to gain insight into United States healthcare policy under the new administration.

The top lawyer at pharmaceutical giant Novartis is retiring after the company signed a $1.2 million contract with President Donald Trump's personal lawyer Michael Cohen.

"Although the contract was legally in order, it was an error", said Ehrat, 61, in a May 16 statement. "As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end".

Novartis is among a handful of companies that have been scrambling to explain why they made payments to Cohen's firm, Essential Consultants LLC.

The announcement came after Novartis was dragged into the scandal over Cohen's payment of $130,000 to U.S. adult film actor Stormy Daniels just days before the 2016 presidential election.

Ehrat, Novartis's general counsel since 2011, had been expected to leave within the next 1-1/2 years, while Jimenez stepped down on February 1 and was replaced by Vas Narasimhan.

Felix Ehrat, Novartis's group general counsel, said in a Wednesday statement that although the company's $100,000-per-month contract with Cohen was legal, "it was an error". Novartis should have done more due diligence, he said.

U.S. special counsel Robert Mueller is investigating the payments as a strand of his wider investigation into Russian interference in the 2016 presidential election and allegations of collusion and obstruction of justice by the Trump campaign.

Apart from AT&T and Novartis, Cohen was also paid by Korea Aerospace Industries and Columbus Nova, a NY investment firm whose biggest client is Renova Group, a conglomerate owned by USA -sanctioned, Kremlin-backed Russian oligarch Victor Vekselberg.

USA lawmakers have demanded Novartis and AT&T, which also made payments to Cohen's firm, provide details and Ron Wyden, the top Democrat on the Senate Finance Committee, has initiated an investigation. In an interview with Bloomberg, Jimenez said he hired Cohen thinking the lawyer had stopped working for Trump and turned to selling "his expertise in terms of knowing the personalities that were in the administration".

Jimenez spoke a day after his successor, Vas Narasimhan, conducted a conference call for 5,000 Novartis managers in which he said the company needs to rethink its approach to the use of consultants and lobbying firms, according to a person familiar with the situation.

Novartis said its representatives met with Cohen in March 2017. "We should have just definitively parted ways with this guy as soon as we knew he was not going to be a help". He maintained that Novartis never acted on any of Cohen's advice or tried to gain access to anyone in the administration. At one point he recommended that the company should build a manufacturing site in the US but Novartis never acted on any of his advice, the ex-CEO added.

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