Novartis top lawyer exits over payment to Trump lawyer

Novartis general counsel steps down over drugmaker's $1.2 million contract with Michael Cohen

Novartis general counsel steps down over drugmaker's $1.2 million contract with Michael Cohen

Michael Avenatti, the lawyer representing the adult-film star Stormy Daniels, alleged in May that a Novartis unit had paid Essential Consulting, a firm linked to Cohen, almost $400,000 in late 2017 and early 2018.

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.

"Although the contract was legally in order, it was an error", Ehrat said in a statement.

"As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end", said Ehrat, who will officially leave June 1.

Novartis paid Cohen's company, Essential Consultants LLC, $1.2 million in exchange for insight into how to navigate the new administration after Trump took office.

The payments became public knowledge after Michael Avenatti, the lawyer for porn actress Stephanie Clifford, who is better known as Stormy Daniels, published details of an account used by Cohen to pay Clifford $130,000 so that she would keep quiet about her affair with the USA president.

Novartis said its general counsel, Felix Ehrat, had made a decision to retire from his position in the "context of discussions" surrounding the payments to Cohen.

Shannon Thyme Klinger, now Novartis' Chief Ethics, Risk and Compliance Officer, will take over the Group General Counsel role from 1 June, and the company has signalled that its compliance and ethics measures will be tightened in response to the affair. Novartis should have done more due diligence, he said.

Cohen did not register his consulting work for Novartis with the Justice Department. It said the payments continued because the contract could not have been terminated.

Trump has denied having an affair with Daniels or knowing anything about that payment but his new lawyer Rudy Giuliani has acknowledged the U.S. president had in fact reimbursed Cohen for the payoff.

Jimenez said he never met Cohen himself but told Forbes they did have a long phone conversation where he asked about Cohen's background. 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.

After the election, drug companies proactively sought to develop policy proposals amid a commitment to repeal and replace the Affordable Care Act, Jimenez said. In addition to those who actually lobby the government, a person would have to register under FARA if they do any kind of public relations for a foreign client or act as a consultant on US policy, as Cohen was hired to do. A trial for another US kickbacks case is scheduled for 2019.

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