Novartis GC Ehrat steps down over 'error' in Trump lawyer agreement

Alonzo Simpson
May 16, 2018

Mr. Ehrat was stepping down "in the context of discussions surrounding Novartis's former agreement with Essential Consultants, owned by Michael Cohen", Novartis said.

Novartis' general counsel Felix Ehart has announced that he will resign after revelations that he was a co-signatory on a controversial contract with USA president Donald Trump's personal lawyer Michael Cohen.

"Although the contract was legally in order, it was an error", Ehrat said on Wednesday.

That's the same firm Cohen used to pay adult film star Stormy Daniels to keep quiet about her alleged affair with Trump.

Ehrat, Novartis's general counsel since 2011, had been expected to leave within the next 1-1/2 years, while Jimenez stepped down on February 1 and was replaced by Vas Narasimhan.

Novartis has said that Ehrat will retire as general counsel in the aftermath of the scandal, and will be replaced by Shannon Thyme Klinger, now chief ethics, risk, and compliance officer, effective June 1. Novartis said she had not been aware of the Cohen contact.

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On May 9, Novartis said it signed a one-year contract for $100,000 a month with the firm in February 2017, seeking advice on the new administration's public health policy.

In an interview with Bloomberg, Jimenez said Cohen told him that he had left Trump's organization and had stopped working for the president before pitching for business with Novartis. 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.

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

Novartis said its representatives met with Cohen in March 2017.

Jimenez spoke a day after his successor, Vas Narasimhan, conducted a conference call for 5,000 Novartis managers in which he said the company needs to rethink its approach to the use of consultants and lobbying firms, according to a person familiar with the situation.

"That was a mistake", said Jimenez who admitted the firm should have "parted ways" with Cohen as soon as it became apparent he could not help. 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. At one point he recommended that the company should build a manufacturing site in the US but Novartis never acted on any of his advice, the ex-CEO added.

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