"We were all tremendously impressed with Lee's program for the future and with the steps he has already taken. In order to more clearly reflect the role he has been given, we have decided to designate Lee as vice president and general manager."
Thomas joined the Phillies in June, succeeding Woody Woodward, who was fired, as vice president and director of player personnel.
Giles said that yesterday's move means he no longer will deal with player- personnel matters unless a contract exceeds $1 million.
"Lee will put a price tag on a player and give it to Tony (vice president Tony Siegle)," Giles said.
"I am bailing out of that part of the business," Giles said. "I won't be involved in the player end. If (Thomas) wants to make any changes that don't affect the financial structure, I will stay out of it."
"We just want to make it clear that Thomas is running the baseball operation - clear to the public," Giles said.
Thomas was hired after Woodward and Giles disagreed on club policy.
Thomas has started revamping the team's minor-league system, which has failed to provide the parent club with the talent it needed in recent years. He has hired a new director of the farm system and a new chief of scouting.
Thomas has said that he is on the telephone every day seeking trades that will help the club, which is last in the NL East with a record of 59-87, 29 1/ 2 games behind the first-place New York Mets.
He has said that he does not expect any trades until the season ends.
Giles said he would devote his time to handling the business end of the club, which includes overseeing radio and television contracts and promotions, and representing the club in major-league affairs.