People, Politics

CEO interrupted: Novartis chief Narasimhan looks to new ethics czar to clean up after the lingering Cohen mess

Struggling to shed a bad rep for a string of ethics scandals capped by the explosive accusations of several US Senators that company execs recently misrepresented the cozy relationship between former CEO Joe Jimenez and President Donald Trump’s personal attorney Michael Cohen, Novartis is once again looking to clean up its act.

CEO Vas Narasimhan has recruited a prominent German attorney to lead their ethics, risk and compliance efforts.

Klaus Moosmayer will now be charged with keeping the company clear of any new ethics scandals, which have come fast and frequently at the pharma giant. The lawyer has spent the past few years as chief compliance officer at Siemens and chairs the Anti-Corruption Taskforce of the Business and Industry Advisory Committee at the Organization for Economic Co-operation and Development.

Moosmayer is taking the place of Shannon Thyme Klinger, newly promoted to group general counsel in the wake of Felix Ehrat’s abrupt resignation during the crisis that hit Novartis as it struggled with revelations about their $1.2 million in payments to Cohen.

Novartis’ explanation — echoed by newly retired CEO Jimenez — was that this was a simple way to gain insights into Trump’s new administration and its healthcare policies. But some company insiders viewed it more like a simple way to pay for access.

A few weeks ago, a group of Democrats in the Senate released their own quick report, concluding that the company’s contention that top execs had only a brief, inconsequential exchange with Cohen and were forced to pay out the contract misrepresented the numerous contacts Jimenez had with Cohen.

“What he was selling was a line of access to the Trump administration,” said Sen. Ron Wyden in an interview with ABC News in July. “That would be how I would characterize it.” Wyden and his colleagues outlined numerous contacts Jimenez had with Cohen.

After initially bemoaning the need to do better in follow-up meetings with staff, Narasimhan and his top staff now insist that the whole issue is behind them. 

The 600-pound gorilla, though, remains in the room, even if it’s not referred to in the company’s statement on its new hire.

Not helping much is that Novartis shook up its ethics and compliance operations last fall in the wake of kickback and bribery accusations. A Korean investigation determined company execs had been conducting a kickback scheme in that country while Novartis also faced corruption charges in Greece.

The chain of scandals has severely interrupted Narasimhan’s campaign to make over Novartis’ rep and present the company as a giant eager to do right by patients and healthcare systems, pursuing the latest in digital strategies to improve care.

“As we aspire to reimagine medicine, we must hold ourselves to (the) highest ethical standards and always aim to win and maintain the trust of society and our many stakeholders,” the CEO said in a statement. “Klaus has extensive experience in leading Compliance for large global organisations and is internationally recognized in his field.”

Image: Klaus Moosmayer. SIEMENS

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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