Corporate Crime's New Top Cop

The Deputy AG will be under pressure to act fast

When Larry D. Thompson was named to the No. 2 position at the Justice Dept., he worked hard not to make a splash. He shunned interviews, gave few speeches, and moved into a modest Washington apartment where he rents everything from the silverware to the linens. In a department full of controversial figures, Thompson set out to be the guy who quietly made things run.

Those days of anonymity are about to end. On July 9, the President tapped the 56-year-old Deputy Attorney General to head his newly minted Corporate Fraud Task Force--"a financial crimes SWAT team," Bush called it. The choice of Thompson as point man on corporate malfeasance was not a hard one. His boss, Attorney General John Ashcroft, has recused himself from the Enron (ENRNQ ) and Arthur Andersen cases. And given the $10,000 that Ashcroft received from WorldCom Inc. (WCOM ) while in the Senate, he may have to drop out of that probe, too.

Besides, Thompson gives Bush what he desperately needs for his war on corporate greed: credibility. Thompson is universally respected in legal circles and has a sterling résumé that includes stints as a U.S. Attorney in Atlanta and a white-collar criminal defense attorney who won an acquittal for a Coca-Cola Co. (KO ) executive accused of bribing a union official. He carries little political baggage. Thompson's one involvement in partisan politics was his work in 1991 to help longtime friend Clarence Thomas win confirmation to the Supreme Court.

Thompson is almost the antithesis of Ashcroft, who is widely viewed as the ideologue assigned to stroke Bush's conservative voter base. In June, for example, Thompson spoke to Justice employees celebrating gay pride month--an appearance Ashcroft is unlikely to have made. "He's the perfect guy for the job," says former U.S. Attorney for Washington Joseph E. diGenova. "He'll be firm but fair." The big question is how he will stand up in a high-profile political job. "Regardless of the credibility that Larry brings, there is going to be enormous pressure on him to show some very tangible results," says Eric H. Holder Jr., Deputy AG in the Clinton Administration.

Bush wants results ASAP. He gave Thompson just 10 days to call the first meeting of the group, which includes FBI director Robert S. Mueller III, two Assistant AGs, and seven U.S. Attorneys. Thompson's task force will not replace an existing task force of career prosecutors working specifically on Enron and Andersen matters. But it will oversee that investigation, as well as securities fraud cases and myriad other probes instigated by at least 17 U.S. Attorneys. These include investigations of Qwest Communications International, Global Crossing, and Adelphia Communications. Legal experts say one of Thompson's highest priorities will be pursuing individuals responsible for WorldCom's $3.8 billion accounting mess.

Outside of legal circles, the view is that Thompson hasn't done much on the corporate crime front so far. "The SEC has been very aggressive. [But] we haven't heard much from the Justice Dept.," says Pfizer CEO Henry A. McKinnell.

But Thompson could surprise the doubters. Behind his low-key persona lies a throw-the-book-at-'em prosecutor. It was his decision, for instance, to prosecute Andersen. Some of his closest friends complained that he caused thousands of innocent Andersen employees to suffer. But Thompson shows little sympathy. "That would be an impermissible consideration," he says unapologetically, noting that in any case there are innocent victims, such as the families of those sent to prison.

Such concerns also may not matter much to a public hungry for some high-profile convictions. Justice sources say to expect more cases like Andersen, which is indicative of a new approach on Thompson's part. A prosecutor who would once spend months or years patiently building a case, he now favors moving once he has something he thinks will stand up in court.

That's important, because the new SWAT team must dispel the view that the wheels of justice are not turning fast enough. If it can't, that will not only be bad for Larry Thompson but bad for George W. Bush, too.

By Dan Carney in Washington, with Amy Barrett in Philadelphia

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