Sinking in the Swamp

There’s been a lot of talk about draining the swamp recently, but not a lot of swamp is getting drained.  According to our Ethics Defined video, “[c]orruption is the abuse of power or position for personal gain.”  In behavior that could not be swampier, Steve Cohen, the president’s “personal attorney,” has, according to Fox News writer Steve Hilton, been selling himself to potential clients as a conduit to President Trump.  Major corporations, including prominently AT&T and Novartis, have been buying what Cohen was selling.

Although it was Novartis’s initial cover story that it paid $1.2 million to Cohen for guidance on “how the Trump administration might approach certain US healthcare policy matters,” there is no reason on God’s green earth to believe that real estate attorney Cohen would know more about health care issues than anyone else who reads the newspapers and pays attention to the President’s tweets.  Novartis’ CEO Vasant Narasimhan admits now that its decision to make the payments was a “mistake” and that when the arrangement was disclosed (by Stormy Daniels’ attorney Michael Avenatti, of all people) it “was not a good day” for Novartis.

AT&T’s CEO Randall Stephenson claims that “everything we did [which was pay $600,000 to Cohen] was done according to law and entirely legitimate.”  On the face of it, it is indeed hard to find a specific law that AT&T or Novartis broke.  It appears that selling access is not a crime, although that fact is a strong argument for enacting new laws.

Although Cohen is obviously the prime moving force in this scandal, it takes two to tango.  The primary moving parties in most international bribery scandals are the foreign government officials who take the bribes.  But we have the Foreign Corrupt Practices Act on the books to do what we in the U.S. can do to reduce the amount of bribery in the international economy.  Via the FCPA, we punish the bribe payers who have connections to the United States.

Fox’s Hilton demands:   “Cohen must apologize, pay back his swamp fees and tell us who else he pitched his services to….[T]here has to be a proper reckoning for the damage Cohen has done with his cynical shameless behavior.” I second Hilton in this demand, but I also do not wish to give a moral pass to companies such as AT&T and Novartis that pay money hoping that in some unspecified but clearly improper way, it will benefit them financially.

What the companies did appears not to have been illegal, but it clearly flunked the famous “newspaper test.”  Neither firm wanted their actions described on the front page of the newspaper.  When this happened, both companies dissembled with several inaccurate versions of the facts, both ultimately admitted that the payments were a “mistake,” and heads did roll.

Both the payments and the public’s reaction to them show us where more rules and regulations are needed, as well as higher moral standards for companies to live up to with or without legal requirements.  Novartis’ Narasimhan wrote that “we are being criticized by a world that expects more from us.”  Only if the world holds these companies to higher standards and demands new laws will any swamps be drained.

Resources

Bob Brigham, “Fox News host blisters ‘shameless’ Michael Cohen for pay-to-play cash grab: Pay back your ‘swamp fees and apologize,'” Raw Story, May 12, 2018.

Danny Cevallos, “ÁT&T and Novartis paid Michael Cohen. Why it’s not considered a bribe—yet,” NBCNews, May 11, 2018.

Steve Overly & Eli Okun, “AT&T, Novartis CEOs apologize for payments to Michael Cohen,” Politico, May 11, 2018.

Andrew Prokop, “Corporations are giving absurd explanations for why they hired Michael Cohen,” Vox, May 9, 2018.

Fredreka Schouten & John Fritze, “AT&T, Novartis face scrutiny over hefty payments to Trump lawyer Michael Cohen,” USA Today, May, 9, 2018.

Emily Stewart, “AT&T’s and Novartis’s payments to Michael Cohen are definitely sketchy but may not be illegal,” Vox, May 11, 2018.

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