CEO Calls Lawyer Payment a 'Mistake' -- WSJ

By Jonathan D. Rockoff 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 11, 2018).

Novartis AG Chief Executive Vasant Narasimhan said the company "made a mistake" agreeing to pay Trump lawyer Michael Cohen $1.2 million for what Novartis has described as his insight into health-care policy.

In an email to the Swiss drug company's employees on Thursday reviewed by The Wall Street Journal, Dr. Narasimhan said he felt "frustrated" by the arrangement, which was struck under a previous chief executive. "Many of you will feel disappointed and frustrated," he said.

"We made a mistake in entering into this engagement and, as a consequence, are being criticized by a world that expects more from us," Dr. Narasimhan said in the email, which was earlier reported by STAT, a healthcare publication of Boston Globe Media.

Dr. Narasimhan, who joined the company in 2005 and became chief executive in February, said he "was not involved in any aspect of this situation."

Novartis disclosed earlier this week that it paid Mr. Cohen's company Essential Consultants LLC $100,000 a month under the one-year contract, which ended in February.

The private company was the same one Mr. Cohen used to direct $130,000 in October 2016 to a former adult-film actress, who goes by the name Stormy Daniels, to prevent her from discussing an alleged sexual encounter with Mr. Trump. Messrs. Trump and Cohen deny the encounter took place.

Novartis, one of the world's biggest drug companies by sales, said its aim by hiring Essential Consultants was to gain better understanding of Trump administration policy-making, especially regarding matters like the status of the Affordable Care Act. Companies routinely pay advisers for policy advice in Washington.

Novartis said Wednesday it realized from its first meeting with Mr. Cohen in March 2017 that he wouldn't be helpful and stopped engaging with him. The company said it determined it couldn't scrap the contract and continued making the payments.

Novartis said it has provided information to special counsel Robert Mueller's office regarding its agreement with Mr. Cohen's company.

Dr. Narasimhan said in the email to Novartis employees that he went to sleep Wednesday night "frustrated and tired." He urged employees to stay focused on the company's mission "serving patients."

(END) Dow Jones Newswires

May 11, 2018 02:47 ET (06:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.