Cohen Pitched Novartis Russia-Tied Investment, Democrats Say
Michael Cohen’s Novartis work was broader then reported, Democrats say
(Bloomberg) -- Michael Cohen, longtime lawyer to President Donald Trump, not only took money from companies looking for insight into the new administration but also pressed one of his clients to take up an investment opportunity to benefit Russian-linked Columbus Nova, another client.
The disclosure, contained in a report produced by an investigation led by Senate Democrats, shows that Cohen promoted the investment in a company backed by Columbus Nova to Novartis AG. Novartis in turn offered a list of ideas on how to lower drug prices and sent it to Cohen, who promised to pass it along to the administration, according to the report.
"The sweetheart deals and backdoor promises documented in this report are a snapshot of Cohen’s multimillion dollar side hustle as influencer-in-chief," said Ron Wyden, Democrat of Oregon and Senate finance committee ranking member.
Cohen challenged the findings.
"Mr. Cohen, who never introduced anyone from Novartis to anyone in the administration or Congress, did not ‘sell access,”’ his spokesman, Lanny Davis, said in a statement. “As a consultant, he provided strategic advice to his client.”
Columbus Nova has been described in federal regulatory filings as an affiliate of the Renova Group, founded by Russian billionaire Viktor Vekselberg. Lawyers for Columbus Nova didn’t immediately comment.
Switzerland-based Novartis, in a statement, disputed the allegations while adding that it had “made a mistake in entering into the contract with Michael Cohen.” The company ultimately rejected the investment suggested by Cohen, a spokesman said. In a June 5 letter to Congress, Novartis said Cohen’s lone meeting with its executives occurred on March 1, 2017, when he met with the company’s general counsel, the head of U.S. operations, and the company’s chief U.S. lobbyist for about 90 minutes at its Manhattan office. They were disappointed.
Cohen "had made no effort to learn anything about Novartis, or the policy issues that were of concern to Novartis specifically, or the pharmaceutical industry generally," Novartis told lawmakers in the letter. Cohen also couldn’t help the company understand how administration officials "would evaluate and respond to the relevant policy issues."
Click here to read Novartis’s statement
Several companies sought help from Cohen after Trump was elected and paid his firm, Essential Consultants, after realizing that established lobbying groups in Washington didn’t have well-developed lines into the new administration. Companies including Novartis, AT&T and Korea Aerospace Industries paid more than $4 million to his firm after the election.
Cohen had repeatedly conveyed a close relationship with Trump in emails to Novartis executives. Novartis said it paid Cohen $1.2 million over one year but terminated its contract after determining he wouldn’t be able to deliver what the company wanted.
The drugmaker’s relationship with Cohen actually lasted about six months longer, according to the Senate Democrats’ report, as then-CEO Joe Jimenez corresponded and had phone conversations on “substantive issues,” such as the administration’s drug pricing proposals. The company had announced in September 2017 that Jimenez would retire by Feb 1.
Emails released by lawmakers show Cohen tried several times to get the attention of Jimenez and other executives even after Novartis had concluded that his services weren’t needed.
Cohen’s efforts continued into this year, according to emails that Novartis disclosed to lawmakers last month. Those include a January 26 message from Cohen to an unidentified Novartis employee requesting a five-minute conversation with Jimenez. A few hours later, the employee replied that Jimenez had retired.
"Can you forward to me the new acting CEO’s contact information as well as set up a quick call?" replied Cohen. He followed up several times by email, and a few weeks later forwarded a New York Times story describing him as a fixer for Trump. Company representatives rebuffed his advances.
‘Substantial Responses’
Novartis provided Wyden’s office “substantial” responses to requests for information in May, the senator said, although it declined to provide internal communications regarding Cohen and his role with the company. Wyden noted that AT&T failed to provide documents about its relationship with Cohen and why he was hired. The Trump administration has been silent, he said.
An AT&T spokeswoman declined to comment on the committee’s report. “We consider the matter closed,” she said.
The company’s new chief executive, Vas Narasimhan, has been dealing with fallout as news of the contract drew interest from Special Counsel Robert Mueller, who is investigating Russian meddling in the U.S. presidential election. Separately, Cohen’s business dealings are the subject of an investigation by federal prosecutors in New York, who raided his homes and business searching for evidence.
Months after communicating with Novartis on the subject of drug pricing, Cohen shifted gears, recommending that the pharmaceutical giant consider investing in a startup that was working on a treatment for autism.
Request to Reconsider
The startup, Yamo Pharmaceuticals, was backed by Columbus Nova, which provided back-office support to the company. Novartis executives had already looked at Yamo and declined to invest. Cohen urged Jimenez to reconsider.
“Can you check to see if it was handled properly because I have seen real time video showing amazing success," he wrote to Jimenez. The Novartis chief responded an hour later, saying he discussed the matter with his top expert on autism treatments.
Novartis passed on the investment opportunity again, the company said. According to the report, Columbus Nova chief executive Andrew Intrater had asked Cohen for help in finding investors for Yamo. Intrater is Vekselberg’s cousin. His firm paid more than $500,000 to Cohen in 2017 for consulting services, according to a lawyer representing Intrater and Columbus Nova.
Yamo didn’t pay Cohen and he didn’t do anything on behalf of the company besides the Novartis outreach, the firm’s lawyer, Alfred E. Mottur, wrote to lawmakers on July 11.
Yamo is closely tied to Columbus Nova and Intrater. Columbus Nova provided accounting and legal support to Yamo, Mottur said. Columbus Nova’s chief operating officer, Eugene Prahin, also serves as Yamo’s chief financial officer.
Vekselberg, a Ukrainian born billionaire who made his fortune in oil and aluminum, attended Trump’s inauguration in January 2017 after Intrater donated $250,000 to the event. Through his own investment firm, Renova, Vekselberg invested in Bank of Cyprus in 2014, alongside Wilbur Ross, who served as the bank’s chairman until he was sworn in as Secretary of Commerce last year.
The U.S. Treasury placed Vekselberg on a list of sanctioned Russians in April, part of a round of restrictions that cut off Renova, among other companies, from Western economies. Renova holds investments in Russian and European chemicals, energy and metals companies.
Vekselberg and Intrater have been questioned by agents working for Mueller, according to the New York Times. Neither Vekselberg nor Renova has ever had contractual or other relationship with Mr. Cohen or Essential Consultants, a Vekselberg representative has said.
Novartis executives weren’t alone in thinking that Cohen had juice, according to the report. Former U.K. Prime Minister Tony Blair had three conversations with Cohen beginning in late 2016 to gain insight into Trump’s thinking, according to an unnamed Blair representative cited in the lawmakers’ report. A representative for Blair didn’t have an immediate comment.
--With assistance from John Lauerman, James Paton, Christian Berthelsen, Scott Moritz and Stephanie Baker.
To contact the reporters on this story: Shahien Nasiripour in New York at snasiripour1@bloomberg.net;Greg Farrell in New York at gregfarrell@bloomberg.net
To contact the editors responsible for this story: Winnie O'Kelley at wokelley@bloomberg.net;Heather Smith at hsmith26@bloomberg.net
©2018 Bloomberg L.P.