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Novartis general counsel to step down after payments to Trump's lawyer

Novartis general counsel to step down after payments to Trump's lawyer
Michael Cohen, right, leaves the U.S. Courthouse in New York on April 26. (Hector Retamal / AFP/Getty Images)

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 President Trump's attorney, as the drugmaker tries to contain the furor from last week's revelation.

Felix Ehrat, who along with former chief executive Joe Jimenez signed the agreement with a consulting firm led by lawyer Michael Cohen, will step down after seven years as Novartis' general counsel, the Basel, Switzerland-based company said Wednesday in a statement. In an interview with Bloomberg, Jimenez said Cohen told him he had left Trump's organization and stopped working for the president before pitching for business with Novartis.

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Novartis' new CEO, Vas Narasimhan, has been grappling with the fallout over the contract, which drew the drugmaker into special counsel Robert S. Mueller III's probe of suspected Russian meddling in the U.S. presidential election.

Narasimhan, who's meeting with investors Wednesday in Basel, conducted a conference call Monday for 5,000 managers in which he said the company needs to rebuild trust and rethink its approach to the use of consultants and lobbying firms, according to a person familiar with the situation.

"Although the contract was legally in order, it was an error," Ehrat said in the statement. "As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end."

Novartis is among a handful of companies that have been scrambling to explain why they made payments to Cohen's firm, Essential Consultants LLC. AT&T Inc., which paid the firm $600,000, forced out veteran lobbyist and attorney Robert Quinn as CEO Randall Stephenson called the hiring of Trump's lawyer a "big mistake" and said that its vetting process had failed.

Novartis has said it quickly determined that Cohen's firm was unable to provide the services it anticipated and after a single early-2017 meeting decided not to engage further. Still, the drugmaker was contractually bound to keep making monthly payments of $100,000 for a year. Novartis has said that Narasimhan had no involvement.

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

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