Speakes Quits Merrill Lynch Job Over Concocted Quotes

Former White House spokesman Larry Speakes quit as chief spokesman for Merrill Lynch & Co. Friday, days after he created an uproar by admitting that he had twice concocted quotes for President Reagan.

Speakes said in a statement that his resignation was “the best course of action for Merrill Lynch and for me personally. Merrill Lynch is a great firm and the industry leader, and I’ve enjoyed being part of it.”

The announcement reflected intense pressure on Speakes to resign as head of communications at the Wall Street investment giant because of his disclosures in a book about his tenure as White House spokesman. He said in the book that he had attributed to Reagan comments that the President never made.

Merrill Lynch said in a statement: “We accept Larry Speakes’ resignation with regret. Larry has made a significant contribution to our firm during his time here, and we wish him well in every regard.”

However, a source familiar with Speakes’ decision, who spoke on condition that he not be identified, said senior Merrill Lynch management wanted him to quit because the phony quote disclosures raised serious questions about his credibility and, by extension, the credibility of the company.

Merrill Lynch spokesman Fred Yager declined to elaborate on Speakes’ resignation. “I think the statement speaks for itself. I’m not going to veer from the statement,” he said.

Speakes joined Merrill Lynch with much fanfare 14 months ago. Sources inside the firm said he earned between $200,000 and $250,000 a year.

Reagan, leaving Washington for a weekend at Camp David, declined to answer reporters’ questions about Speakes, saying only “no comment” just before he stepped into his helicopter.

The resignation was announced after Speakes scrapped plans to attend a White House Correspondents’ Assn. dinner in Washington this week as guest of the Washington Post. Earlier, he canceled an appearance at Denison University in Granville, Ohio, because of what school officials called the controversy over his new book, titled “Speaking Out.”

Speakes admitted in the book that on two occasions he had attributed to Reagan quotes that the President never said. Earlier last week, Speakes claimed that he told Reagan about the quotes later, but Reagan denied that.

In his book, Speakes says he quoted Reagan as saying after the downing of a Korean Air Lines passenger jet in 1983 by the Soviet Union that the incident posed a problem not between the Soviet Union and the United States but a “Soviet versus the world problem.”

He said that comment really came from Secretary of State George P. Shultz.

Speakes said he also credited Reagan with some suggestions for possible retaliatory measures, which also had been made by Shultz.

In the other instance, Speakes says he quoted Reagan as telling Soviet leader Mikhail S. Gorbachev during their Geneva summit meeting, “There is much that divides us, but I believe the world breathes easier because we are talking here together.”

He said in the book that he and a press aide, Mark Weinberg, concocted this quotation.

The disclosures created an uproar among the present White House press office staff and was criticized by a broad range of professionals in the public relations business, who said it damaged his credibility.

Speakes successor Marlin Fitzwater, who had excoriated Speakes earlier in the week for the fabricated quotes, told reporters Friday, “I’m sorry for him, personally.”

Fitzwater said he had no further comment.

On Monday, Fitzwater, who succeeded Speakes as Reagan’s chief spokesman, had labeled his predecessor’s conduct “a damn outrage.”