Novartis has announced the departure of its top lawyer over $1.2m the Swiss drug maker paid to an company owned by Donald Trump’s personal lawyer in the year following the president’s 2017 inauguration.
Felix Ehrat, group general counsel since 2011, said he would “take personal responsibility” for the agreement with Michael Cohen’s Essential Consultants, which he signed with Joe Jimenez, Novartis’s then chief executive.
Novartis last week admitted paying $100,000 in monthly instalments for a year to Essential Consultants. The deal was meant to help it understand the new administration’s healthcare agenda. After one meeting Novartis decided the contract would not deliver the services it required – but under its terms, the monthly payments could not be stopped until February this year.
In a statement on Wednesday, Mr Ehrat said: “Although the contract was legally in order, it was an error. As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end.”
His retirement comes as Vas Narasimhan, who took over from Mr Jimenez as chief executive in February, battles to contain the fall out from the controversy over whether multinationals sought improper access to the new US president’s inner circle.
Although other companies such as AT&T and Korean Aerospace have also been caught in the controversy, the revelations are particularly embarrassing for Novartis, because it was Essential Consultants’ largest client.
Mr Ehrat will be replaced as Novartis’s group general counsel by Shannon Klinger, currently chief ethics, risk and compliance officer.
Jörg Reinhardt, Novartis’s chairman, said: “I appreciate Felix’s decision even as we regret his departure”.
Mr Narasimhan has described the contract with Mr Cohen as a “mistake”. In an internal memo to staff last week, he expressed frustration at the criticism Novartis has faced from “a world that expects more from us”. But Mr Narasimhan said he “was not involved with any aspect of this situation”.
Earlier this week, the Swiss attorney-general’s office in Bern said it had “taken note” of reports about the deal, and was “in contact” with prosecutors in Basel, where Novartis has its headquarters. But it added that “the federal prosecutor has not currently opened any criminal proceedings in this connection”.