Novartis Top Lawyer Resigns Over Cohen Payments, Calls Contract an 'Error'

Joanna Estrada
May 17, 2018

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

Veteran group general counsel of Swiss healthcare giant Novartis, Felix Ehrat, is standing down after admitting "an error" relating to the company's former agreement with US President Donald Trump's personal lawyer.

Ehrat announced he'd step down from Novartis in June, admitted the Cohen deal was "an error".

"As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end", Ehrat said Wednesday. According to earlier reports, Essential Consultants reached out to Novartis in February 2017, promising senior officials access to President Trump if they contracted with their company.

Felix Ehrat inked the one-year deal with Cohen's Essential Consultants, the shell company he used to pay porn star Stormy Daniels to keep mum about an alleged affair with the president.

On Wednesday, Novartis's general counsel Feliz Ehrat apologised for making the deal in the first place.

Narasimhan called the contract a major mistake at a meeting with investors in Basel and said Novartis is developing a principles-, not rules-based system to avert corruption.

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Novartis Top Lawyer Resigns Over Cohen Payments, Calls Contract an 'Error'

"After my team met with him individually, it was clear that he oversold his abilities", Jimenez told Bloomberg.

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. It said the payments continued because the contract could not have been terminated.

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. Novartis should have done more due diligence and "definitively parted ways" with Cohen as soon as it knew he wouldn't be able to help, the former CEO said. A trial for another USA kickbacks case is scheduled for 2019.

Jimenez said in the interview that a "third party" had recommended Cohen to Novartis, declining to identify that person.

Novartis shareholders have urged Narasimhan to exert more "moral influence" over perceived ethical shortcomings that Jimenez in 2016 blamed on a "results-oriented" sales culture and some bad actors.

After the election, drug companies proactively sought to develop policy proposals amid a commitment to repeal and replace the Affordable Care Act, Jimenez said.

Other reports by Click Lancashire

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