Update: May 9, 2018: Novartis on Wednesday issued a statement disclosing new details of its agreement with Essential Consultants, revealing it paid the Michael Cohen-linked company $100,000 per month over a one-year contract worth $1.2 million. The Swiss drugmaker engaged the firm to seek advice on how the Trump Administration would approach U.S. healthcare policy, including the Affordable Care Act.
According to Novartis, after initially meeting with Cohen in March 2017, the company realized he would not be able to provide the agreed-to services and did not engage again. Novartis claims it was unable to terminate the contract without cause, but did not specify what that would have constituted.
Additionally, the drugmaker strongly pushed back against any suggestion a January 2018 dinner hosted by President Trump and attended by CEO Vas Narasimhan was connected to the agreement with Essential Consultants.
- Swiss pharma Novartis paid $1.2 million to an account owned by a company linked to President Donald Trump's personal lawyer Michael Cohen, the drugmaker confirmed Wednesday. The disclosure came a day after an attorney representing Stephanie Clifford, the adult film star better known as Stormy Daniels, posted documents online detailing some of the payments.
- The money, paid in installments of $100,000 per month from February 2017 to February 2018, put Novartis in the midst of rising scrutiny into Cohen and his role in paying Clifford to keep accusations of an affair with Trump quiet. The company, Essential Consultants LLC, was earlier used to make the now-famous $130,000 payment to Clifford.
- A spokesperson for Novartis confirmed the company had entered into a one-year agreement with Essential Consultants following the 2016 election. The contract expired in February, Novartis said, and predated Vas Narasimhan becoming company CEO.
Novartis finds itself in the uniquely uncomfortable position of explaining payments made to an apparent shell company at the heart of converging storylines involving Cohen's payment to Clifford and the ongoing questioning of ties between Russia and Trump insiders.
Clifford's lawyer, Michael Avenatti, laid out in his report $4.4 million of what he characterizes as "suspicious transactions" flowing to an account held by Essential Consultants between October 2016 and January 2018. Chief among these is a $500,000 payment from a company linked to Russian oligarch Viktor Vekselberg.
While there is no apparent connection between the investigations into Cohen and the payments made by Novartis, the Swiss company confirmed it was contacted by lawyers from the office of Special Counsel Robert Mueller in late 2017.
"Novartis cooperated fully with the Special Counsel’s office and provided all the information requested," a company spokesperson said. "Novartis considers this matter closed as to itself and is not aware of any outstanding questions regarding the agreement."
Novartis said its agreement with Essential Consultants sought advice on the Trump administration's approach to U.S. healthcare policy, including the Affordable Care Act, and that it was consistent with market terms.
According to Avenatti's report, Novartis Investments SARL sent $99,980 to Essential Consultants through wire transfers originating from the Swiss arm of UBS, a multinational bank. The first payment detailed by Avenatti was received on Oct. 5, 2017, with the three others following in November, December and January 2018.
Novartis later said the contract provided for a $100,000 payment per month.
Avenatti did not post any financial documents to corroborate the information he published concerning Essential Consultants. The New York Times and NBC News reviewed records that appeared to support the claims laid out in Avenatti's report, both publications said in separate articles.
AT&T and a Korean defense firm also reportedly paid Essential Consultants.
Novartis said current CEO Vas Narasimhan had no involvement in the agreement between the drugmaker and Essential Consultants. Novartis announced in September 2017 that its former CEO Joe Jimenez would step down and Narasimhan would take over beginning Feb. 1, 2018.
Narasimhan did attend a dinner hosted by President Trump in Davos, Switzerland in early January. In its Wednesday statement, Novartis specifically pushed back on any suggestion that this meeting was linked with the Essential Consultants agreement.
The attention is particularly unwelcome for Novartis, which has recently had to fend off accusations of bribing politicians in Greece to help secure more favorable treatment for its drugs.
Similar troubles have dogged the drugmaker before. Last year, South Korea fined the company $49 million for giving kickbacks to doctors prescribing its drugs and, in 2015, the drugmaker paid $390 million to settle civil fraud allegations with the Department of Justice.