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Larry D. Thompson’s high-level government experience helped land him the general counsel post at PepsiCo Inc. Thompson, 58, formerly the second in command at the U.S. Department of Justice, also will head the government relations department at the Purchase, N.Y.-based company, which reported $27 billion in 2003 revenue. He will replace David R. Andrews, 62, who is scheduled to retire in February, and report directly to PepsiCo CEO Steven S. Reinemund. After leaving the Justice Department a year ago, Thompson taught at the University of Georgia School of Law and was a senior fellow at the Brookings Institution in Washington. Thompson spent many years as a partner at King & Spalding, which serves as outside counsel to PepsiCo’s prime competitor, The Coca-Cola Co. Coke is also in the market for a general counsel; GC Deval L. Patrick is slated to leave at year-end. Coke officials would not say whether Thompson had been offered the Coke job. Thompson was not available for comment before press time. Thompson received a number of job offers, according to Griffin B. Bell, senior counsel at King & Spalding and a longtime friend. He said Thompson chose the PepsiCo position in part because he also will head the company’s government relations department. PepsiCo’s international reach means Thompson will get to handle legal and business issues worldwide. “I can see how he was attracted to it,” Bell said. Thompson’s strong background in government made him an attractive candidate in the new Sarbanes-Oxley era of increased government regulation and scrutiny, said other lawyers and Pepsi-watchers. PepsiCo CEO Reinemund was so impressed with Thompson that he hired him on the spot, Bell said. “That shows a very quick-thinking CEO,” he said. Reinemund was not available for comment. As U.S. deputy attorney general from 2001 to 2003, Thompson supervised operations at the Justice Department, including its ongoing Enron investigation. In 2002, he spearheaded the Bush administration’s Corporate Fraud Task Force, and he also chaired the DOJ’s National Security Coordination Council. He also spent time in Georgia government, between two stints as a partner at King & Spalding, where he handled civil and criminal litigation. After joining the firm in 1977, he left in 1982 to spend four years as the U.S. Attorney for the Northern District of Georgia, where he directed the Southeastern Organized Crime Drug Enforcement Task Force and served on the attorney general’s Economic Crime Council. He returned to King & Spalding in 1986, staying until 2001 when he accepted the Justice Department post. Many top companies are looking for general counsel with strong Washington experience in the post-Enron regulatory environment, said June Eichbaum, who specializes in general counsel recruitment for executive search firm Heidrick & Struggles. They want people, such as Thompson, who have strong regulatory, enforcement and litigation backgrounds, she said. For example, she said, in January, Charlotte, N.C.-based Bank of America Corp. hired Timothy J. Mayopoulos, the federal prosecutor in the Whitewater investigations during the Clinton administration, as general counsel; in March, the McLean, Va.-based Federal Home Mortgage Corp. hired Ralph F. Boyd Jr., a former U.S. assistant attorney general and former senior partner at Alston & Bird, as general counsel. General counsel take on a new importance in this environment, where corporate governance has become a major issue, Eichbaum explained. They serve as business and legal advisers to the CEO and the board of directors, which faces increased fiduciary responsibilities under Sarbanes. “Who better to advise a board of directors on their exercise of fiduciary duties than someone with Larry’s experience?” she said, citing his tenure at the Justice Department, his work advising corporations for King & Spalding and his experience as a federal prosecutor. Mark D. Wincek, the partner who handles the PepsiCo relationship for Kilpatrick Stockton, agreed that corporate governance issues are more important than ever. “[PepsiCo] needed somebody who had a good understanding of the regulatory environment as well as great legal credentials. Larry’s a star in both those respects,” he said. Knowledge of government’s inner workings could be valuable to PepsiCo, which is facing a Securities and Exchange Commission probe of its beverage and snack units. Those units allegedly assisted Kmart Holding Corp. in improper accounting by allowing the retailer to record the timing of payments improperly. However, industry experts say the probe is not significant. “Pepsi’s legal situation is clean as a whistle,” said John Sicher, editor of Beverage Digest, a magazine that follows the soft drink industry. He called the Kmart accounting issue a “minor and immaterial item.” In a prepared statement, PepsiCo CEO Reinemund called outgoing general counsel Andrews’ tenure a period of “unprecedented legal and governance change,” and praised Andrews’ work keeping the company’s corporate governance practices highly rated. Andrews also has a background in government, serving as legal adviser to the U.S. State Department from 1997 to 2000. Thompson, a longtime Atlantan, will be based at PepsiCo’s New York headquarters but will maintain a residence here, according to Bell, who said, “He’ll keep his roots in Atlanta.”

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