Insights Nigel Fairbrass

Same old Swamp

An extraordinary week for Novartis and AT&T as it emerges that they have been paying hundreds of thousands of dollars into a shell company owned and operated by President Trump’s former lawyer, Michael Cohen. Plus Goodwood Racecourse emerges with dignity intact after a difficult few days.

Swiss pharma giant Novartis and telecoms behemoth AT&T have been scrambling this week as it emerged they paid hundreds of thousands of dollars into a shell company run by Michael Cohen, President Trump’s former attorney.  Ostensibly for lobbying services, Novartis apparently then decided not to proceed with the relationship, yet it paid Cohen $1.2 million over 12 months anyway.

Compounding the impression of sleaze, the revelation was made by the legal team for adult entertainment star Stormy Daniels, which identified the company, called Essential Consultants, as the source of the now infamous $130,000 ‘hush’ payment to the actress. According to the documentation, Essential Consultants was also hired by Korea Aerospace Industries and Columbus Nova, a firm linked to Russian oligarch Viktor Vekselberg, who was sanctioned last month in response to Kremlin interference in the U.S. election.

Response? In their responses, both Novartis and AT&T tried desperately to nail a lid on the story.  Inquiries by federal investigators under Robert Mueller were painted as historic (last November), and fully satisfied – so nothing to see here.  “Novartis considers this matter closed as to itself and is not aware of any outstanding questions regarding the agreement”, averred spokeswoman Sofina Mirza-Reid.  As to why the company might hire Cohen and decide after one meeting not to use his services, but then still pay him $1.2m, Novartis said: “the contract unfortunately could only be terminated for cause, [so] payments continued to be made until the contract expired by its own terms in February 2018.”

Similarly bizzare and baffling claims emerged from other clients to Essential Consultants, with Korea Aerospace Industries claiming it hired Cohen for guidance with reorganising its internal accounting system, and that it had no idea his firm had a connection to Trump when it paid him $150,000.

In the case of Novartis, advice on the direction of US healthcare policy is presumably a highly technical and complex business, so one can only marvel that the company might enter into a 12 month contract with a company that apparently had no expertise in the area.  Unless of course, as had been widely speculated, Cohen was offering no more than pay-to-play access to the new Trump administration.

What could have been done better? Few of the responses offered by the companies contracted to Essential Consultants pass the smell test, and the somewhat high-handed approach taken by some will only invite more scrutiny.  Entering into a contract with Michael Cohen’s Essential Consultants was self-evidently a colossal error of judgement, financially and ethically, and Novartis and others might have been better served by acknowledging that up front.  Whether Novartis and others were aware of the connection to Stormy Daniels is not clear, but not getting the story out on their own terms now looks unfortunate.

Racing demons

Goodwood Racecourse found itself on the front pages this week following a mass-brawl that broke out involving an estimated 50 men at the normally genteel Sussex course.  Alex Eade, the course’s manager, said his staff were “heartbroken” by the incident which left four people requiring hospital treatment and raised more questions about racecourse behaviour following recent incidents at other major meetings.  Footage of the fight circulated widely on traditional and social media platforms, but the course was quick to comment in a way which was honest, direct and human.

“Some of my team were in tears,” Eade said, “because we spend so much time making Goodwood the sort of tranquil, special, beautiful place that it is, and then it gets punctured by a few idiots in what was a nasty, vicious fight.”

Course owner, the Duke of Richmond followed this up by apologising to racegoers, pointing out that he was there with his family at the time. He committed to do ‘whatever is necessary, and to invest whatever is required, to maintain the safety and security of all our members and customers.’