Novartis Lawyer Departs Over Cohen Payments -- Update
May 16 2018 - 5:55AM
Dow Jones News
By Brian Blackstone and Max Bernhard
ZURICH -- A top executive at Swiss drugmaker Novartis AG is
stepping down as the global fallout widens from the recent
disclosure of payments to a company owned by U.S. President Donald
Trump's longtime personal lawyer.
Novartis said Wednesday that general counsel Felix Ehrat, 61
years old, is retiring from the company in connection with $1.2
million in payments it made over the course of a year to Michael
Cohen's shell company, Essential Consultants LLC.
It was the second high-profile ouster in less than a week in
relation to payments to the company. AT&T Inc., which paid Mr.
Cohen's company $600,000 last year, said Friday that hiring him as
a political consultant was a "big mistake" and ousted its top
Washington executive, Bob Quinn.
Novartis has said the payments, made in $100,000 monthly
installments under a contract that ended in February, were aimed at
gaining insight into U.S. health-care policy. Novartis Chief
Executive Vasant Narasimhan last week called the agreement a
mistake and denied any involvement himself.
The company said Wednesday that Mr. Narasimhan's predecessor,
Joseph Jimenez, signed off on the arrangement.
Mr. Jimenez, who stepped down in January, didn't immediately
respond to a request for comment.
Last week's disclosure is an embarrassment for Novartis, having
spent shareholder money on Mr. Cohen, who appears to have produced
little help.
"Although the contract was legally in order, it was an error,"
Mr. Ehrat said in a statement released by Novartis on Wednesday.
"As a co-signatory with our former CEO, I take personal
responsibility to bring the public debate on this matter to an
end."
Novartis, one of the world's biggest drug companies by sales,
said last week that its aim was to gain better understanding of
Trump administration policy-making, especially regarding matters
like the status of the Affordable Care Act. But it realized from
its first meeting in March 2017 that it wouldn't be helpful and
stopped engaging with Mr. Cohen. The company said it determined it
couldn't scrap the contract and continued making the payments.
Essential Consultants is the same firm Mr. Cohen used to pay
$130,000 to a former adult-film actress, who goes by the name
Stormy Daniels, in October 2016 to keep her from discussing an
alleged sexual encounter with Mr. Trump. Both Mr. Trump and Mr.
Cohen deny the encounter took place.
Mr. Ehrat will be replaced at Novartis by Shannon Thyme Klinger,
who currently holds the position of chief ethics, risk and
compliance officer. She will be appointed effective June 1,
Novartis said.
--Donato Paolo Mancini contributed to this article.
Write to Brian Blackstone at brian.blackstone@wsj.com and Max
Bernhard at Max.Bernhard@dowjones.com
(END) Dow Jones Newswires
May 16, 2018 05:40 ET (09:40 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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