Published: Thu, May 17, 2018
Technology | By Nina Perez

Novartis' top lawyer resigns in wake of Trump scandal

Novartis' top lawyer resigns in wake of Trump scandal

The move comes after Novartis was dragged into the scandal surrounding the actions of Trump's personal lawyer, Michael Cohen, and whether the president attempted to cover up an alleged affair with the former porn star Stormy Daniels in 2006.

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. "As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end", Ehrat, 60, said in a statement released Wednesday.

Cohen's Essential Consultants received $1.2 million from Novartis in a one-year contract ending in February 2018.

The announcement comes after Novartis was dragged into the scandal over Cohen's payment of $130,000 to US porn actress Stormy Daniels just days before the 2016 presidential election. Writing to Narasimhan on Friday, Wyden demanded detailed answers about the Cohen agreement, including who at Novartis had approved it and what the company had expected in return for its $1.2m payment.

Shannon Thyme Klinger, who is now the chief ethics, risk and compliance officer at Novartis, will take Ehrat's place as Group General Counsel on June 1.

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.

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A "third party" recommended Cohen to Novartis, Jimenez said, declining to identify that person.

Novartis ended the contract with Cohen, which paid out $100,000 a month, earlier this year. It said it believed that Cohen could advise the company on the Trump administration's approach to healthcare policies, including the Affordable Care Act.

Jimenez said he had wanted to terminate the 12-month deal with Essential Communications as soon as he realised this was the case but decided against doing so because of potential legal costs involved - a decision he now considers a "mistake".

"Our new executive team and I have a deep commitment to ensure we always operate with the highest integrity and sound judgment and will work hard to rebuild lasting trust with society", said Narasimhan in a separate statement.

After a much-publicized series of scandals and legal actions in Japan, Novartis has fielded bribery and kickback allegations in multiple countries-twice, in China's case-and paid at least two related fines: A $50 million penatly to South Korean authorities a year ago in a doctor kickbacks case and $25 million to the US government to settle charges of illegal doctor payments in China. A trial for another USA kickbacks case is scheduled for 2019.

Novartis has faced public outrage in recent weeks over its payment to Essential Consultants, a company founded by Mr. Cohen in 2016.

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