Published: Wed, May 16, 2018
Technology | By Christopher Mann

Novartis lawyer steps down over Trump lawyer payment

Novartis lawyer steps down over Trump lawyer payment

Ehrat is to resign from the Basel-based pharma after revelations the firm paid $1.2 million to a company controlled by the United States president's personal lawyer Michael Cohen.

Novartis AG's top lawyer became the first executive to take the fall for the controversial $1.2 million in payments he helped arrange to Donald Trump's attorney, as the drugmaker tries to contain the furor from last week's revelation.

Mr. Ehrat said: "Although the contract was legally in order, it was an error".

"With the recent change in administration, Novartis believed that Michael Cohen could advise the company as to how the Trump administration might approach certain U.S. healthcare policy matters, including the Affordable Care Act", Novartis stated.

Novartis had also paid Cohen into the account, which is the same LLC that Cohen used to pay $130,000 to adult-film star Stormy Daniels, allegedly for her silence about an affair she claims she had with Trump.

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On May 16, Novartis's general counsel Feliz R. Ehrat apologised for making the deal.

Shannon Thyme Klinger, now Chief Ethics, Risk and Compliance Officer, will be appointed Group General Counsel, effective June 1, 2018.

Novartis' new CEO Vas Narasimhan has since admitted that the payments were a serious error, but has been careful to distance himself from the decision.

United States 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.

Jimenez said the contract with Cohen was negotiated with Novartis' legal team after an introduction from an unidentified "third party", and that he had not met the lawyer in person.

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On 9 May, Novartis said it had signed a one-year contract for $100,000 a month with Cohen's firm in February 2017, seeking advice on the new administration's public health policy. The former CEO said he wanted to terminate the deal but ultimately decided that trying to end it would have been costlier than letting the agreement expire because of "almost certain litigation", he said. "We should have just definitively parted ways with this guy as soon as we knew he was not going to be a help".

In the United States, the revelations have prompted Democrat Senator Ron Wyden, ranking member of the Senate Finance Committee, to launch an inquiry.

Jimenez told Bloomberg that Cohen had "oversold his abilities" in being able to explain the then-new Trump administration's position on healthcare issues.

Ehrat's retirement echoes that last week of of AT&T's top lobbyist, Bob Quinn, who had responsibility for that company's hiring of Cohen and his Essential Consultants vehicle.

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