By John Miller
ZURICH (Reuters) - Swiss drugmaker Novartis (S:NOVN) has ended a contract with a firm linked to U.S. President Donald Trump's lawyer, Michael Cohen, saying it was now seen as a mistake.
Novartis, which has not been accused of any illegal activity, made payments totaling nearly $1.2 million to the U.S. firm. It was approached last year by the U.S. special counsel who wanted to know about the money while probing potential meddling in the 2016 U.S. election.
The company said it had ended the one-year contract with Cohen's firm struck in February 2017. An attorney for porn star Stormy Daniels named Novartis among companies that made payments to Cohen's Essential Consultants outfit until early this year.
The contract with Cohen, who is the subject of a criminal investigation, was struck before Novartis Chief Executive Vas Narasimhan was promoted on Feb. 1 from Novartis's chief drug developer to CEO.
The Harvard-trained doctor has vowed to burnish Novartis's reputation as a maker of innovative drugs and leave allegations of wrongdoing behind.
"In hindsight, this must be seen as a mistake," senior Novartis spokesman Michael Willi told Reuters. He did not elaborate.
Narasimhan was among business leaders who dined with Trump in January at Switzerland's World Economic Forum annual meeting.
In February 2017, Novartis inked the one-year pact with Essential Consultants that the Swiss company said was focused on U.S. healthcare policy. "The terms were consistent with the market. The agreement expired in February 2018."
The consulting contract called for monthly payments of $100,000 each, though wire transfer fees reduced the amounts slightly, Novartis said.
Novartis said it engaged Essential Consultants at a time when the Swiss company was led by CEO Joe Jimenez, adding: "Dr. Narasimhan had no involvement whatsoever."
Jimenez did not return a message seeking comment.
Michael Avenatti, Daniels' attorney, speaking in U.S. television interviews with ABC and MSNBC on Tuesday, declined to say where he received the information about the payments. He also said AT&T (NYSE:T) and Korea Aerospace Industries Ltd made separate payments.
Novartis was contacted last year by Special Counsel Robert Mueller's office regarding the Essential Consultants pact, it said.
"Novartis cooperated fully with the Special Counsel's office and provided all the information requested. Novartis considers this matter closed."
Avenatti raised questions about the companies' actions, including Novartis, telling MSNBC it was unclear what healthcare expertise Cohen could provide to a global drug firm.
In March, shareholders criticized Novartis executives at its annual meeting, urging them to exert greater "moral influence" amid allegations of corruption in Greece.
Since 2015, Novartis has paid hundreds of millions in settlements and fines after kickback allegations in South Korea, the United States and China.
Daniels, whose real name is Stephanie Clifford, maintains Cohen paid her $130,000 to hush up a 2006 sexual encounter with Trump. He denies any affair with Daniels.
Russia denies election interference allegations, and Trump has denied any collusion.