Being an outside contender during the 2016 presidential election, the election of Donald Trump sent companies in panic mode as they struggled to understand the new president. Some campanies turned to an unconventional place in a bid to get solution: Trump’s New York lawyer and longtime fixer Michael Cohen.
Payments at Novartis AG (ADR) (NYSE:NV) and AT&T Inc. (NYSE:T) indicate frantic moves by companies, which are known to have robust lobbying powers were seeking people with enough knowledgeable information about Trump’s Washington. The backdoor means may not have been illegal but now they have attracted the scrutiny of Robert Mueller, who is investigating Trump’s campaign.
Companies are required to report any formal lobbying with Congress or Cabinet agencies on a quarterly basis. By approaching Cohen, who is a registered lobbyist, not part of the government or part of the pharmaceutical or telecommunications industries is unethical and amounts to abuse.
In themselves, the payments made by the two companies are not illegal. This is because there is no law that prohibits companies from paying for professional services. However, the payments have put two corporate giants in the wider furor that surround the interference into the elections by Russia. In a way, the payments are connected to Trump as well as the adult film actress Stephanie Clifford, whose real names are Stormy Daniels.
The two companies have admitted making the payments to Cohen so as to try understand as well as have better access to the new government. According to sources close to the matter, the discussions with Novartis were initiated by Cohen.
Novartis has indicated that it paid a total of $1.2 million in 12 monthly payments to Cohen. The company started making the payments in February 2017, a few days after the inauguration of Trump. Novartis said that it later came to discover that it won’t get enough help from Cohen but continued to make the payments so as to honor the contract they had.
In a statement, AT&T indicated that it was approached by Mueller’s office. The company says that it fully cooperated and offered all the information that was requested in November and December of 2017.