Former U.S. deputy attorney general to be named Volkswagen monitor - source

By David Shepardson

WASHINGTON (Reuters) - The U.S. Justice Department is expected to name a deputy attorney general under former President George W. Bush to serve as independent monitor of Volkswagen AG under a plea agreement over its diesel emissions scandal, a source briefed on the matter said on Wednesday.

Larry Thompson, a lawyer at Finch McCranie LLP who was deputy attorney general from 2001 to 2003, is expected to be tapped to oversee the world's largest automaker for three years. According to the plea agreement announced in January, VW must make reforms and faces a monitor's oversight. It is set to be sentenced to three years' probation on Friday by a federal judge in Detroit.

Thompson and the Justice Department did not immediately respond to requests for comment. Volkswagen also did not immediately comment.

As deputy attorney general, Thompson led the government-wide corporate fraud task force and oversaw the prosecution of the collapsed energy company Enron Corp. He also served as a U.S. attorney in Georgia and general counsel at PepsiCo .

He was previously a partner at Atlanta-based law firm King & Spalding LLP, where he co-founded the firm's special matters and government investigations practice.

The September 2015 disclosure that VW intentionally cheated on emissions tests for at least six years led to the ouster of its chief executive, damaged the German-based automaker's reputation around the world and prompted massive bills.

On Friday, the company said it had bought back or repaired more than half of 475,000 polluting 2.0-liter diesel vehicles under a U.S. government settlement, just six months after it launched the largest-ever automotive repurchase offer.

In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles.

Thompson and his team will have access to Volkswagen documents and assess the efforts of VW's board of management and senior management to comply with environmental laws.

The monitor will file at least two follow-up reports with the Justice Department and conduct interviews in Germany, the United States and potentially elsewhere with VW employees.

The company will also face separate annual environmental management systems audits over the next three years.

(Reporting by David Shepardson; Editing by Lisa Shumaker and Peter Cooney)