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Novartis’ $1.2m payment to Trump’s lawyer raises more questions than answers

Published on 10/05/18 at 09:29am

Novartis payment to President Trump’s personal lawyer, Michael Cohen, had seemed fairly odd from the beginning – with many asking the same question, what was the company paying for?

In a statement, it tried to clarify why a payment as large as $1.2 million, up from the $400,000 previously revealed, over the course of the year was made to the lawyer, who has no background in healthcare, and his consultancy firm, Essential Consultants.

The statement read, “With the recent change in administration, Novartis believed that Michael Cohen could advise the company as to how the Trump administration might approach certain US healthcare policy matters, including the Affordable Care Act.”

It then continues to explain that, “In March 2017, Novartis had its first meeting with Michael Cohen under this agreement. Following this initial meeting, Novartis determined that Michael Cohen and Essential Consultants would be unable to provide the services that Novartis had anticipated related to US healthcare policy matters and the decision was taken not to engage further.”

If this is the narrative as it unfolded then this means that Novartis sank $1.2 million in return for one, entirely unproductive meeting but this raises the next question as to why the company didn’t exit the year-long contract with the consultancy after the first meeting?

Novartis suggested that the contract could “only be terminated for cause” – Cohen being unable to provide the services for which he was engaged did not seem to be of sufficient cause for the contract to be broken.

A possible explanation for this has been offered by an employee of Novartis, via STAT, who suggested that Novartis did not want to potentially “anger” the President by cancelling the contract early.

If this is the case then shareholders in the company will be reasonably interested to know why sufficient background wasn’t done on Cohen to determine whether he could offer the services promised before entering into a lengthy and expensive contract.

One question Novartis clearly isn’t too happy to be asked is regarding, current CEO, Vas Narasimhan’s meeting with Trump at Davos: “Contrary to recent media reports, this agreement was also in no way related to the group dinner Narasimhan had at the World Economic Forum in Davos with President Trump and 15 Europe based industry leaders. Suggestions to the contrary clearly misrepresent the facts and can only be intended to further personal or political agendas as to which Novartis should not be a part.”

As much as Novartis would like this story to be put to bed by the statement, there are just too many question marks left to be answered for that to be likely the case.

Though, in regards to Robert Mueller’s investigation into the payments, it has played its part and provided all the information requested of it so does not anticipate have to be drawn into the case any further.

Ben Hargreaves

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