THEATER : Fame’s Funny Foibles : From English royalty to Mafioso, ‘Loose Lips’ spews forth a wicked collection of transgressions from tape and testimony.

Loose lips often do more than sink ships. They destroy friendships and marriages, dash reputations, ruin careers, decimate business deals, occasionally throw whole governments into a tizzy. They can also make for some really funny theater.

Such is the thinking behind “Loose Lips” (opening tonight at the Santa Monica Playhouse), a comedy revue created solely from real-life material: a wicked collection of court transcripts, secret tape recordings and open-mike transmissions. The subjects are a grab-bag of the famous and infamous, from Robert Packwood to Marion Barry, Gennifer Flowers, Roseanne, Orson Welles and Spike Lee. Across the Atlantic, Prince Charles is quoted in a chilly conversation with Princess Diana, and a much warmer one with Camilla Parker-Bowles.

“Loose Lips”--which will be performed with a roving roster of celebrity guest narrators (Robert Morse is tonight’s emcee)--is the brainchild of Spy magazine alumni Kurt Andersen, Lisa Birnbach and Jamie Malanowski.

What was raw material for the magazine became raw material for “Loose Lips.” “Spy liked to do a lot of transcripts,” explains Malanowski, who is now a senior editor at Esquire. “Especially in my column, ‘The Fine Print’: A lot of it came from testimony, dirty feed off of satellite dishes, things that were taped unawares. Some of the transmissions were in the public domain. You cast a wide net when you work for a magazine like Spy; you keep your antenna up. And we were fairly intrepid. Also, colleagues see things, readers send things in.”

The trio quickly found that truth was often stranger--and infinitely more interesting--than fiction.

“Over and over, we’d find, in a news account of a trial, that [reporters] would only have 500 words to work with,” Malanowski says. “But if you dug a little deeper, you’d find these wonderful things. The best ones weren’t just gaffes and malapropisms and inane statements, but actually revealed something about the people involved. And because these are famous people, it has a real documentary effect to it. So on an intellectual and voyeuristic level, it’s really funny. But in addition to being goofy and satiric, you’ve got these real insights.”

And if the insight is unfavorable? Where does one cross the line between social commentary and personal cattiness?

“Certainly there is a balance,” acknowledges Birnbach, author of “The Preppy Handbook.” “But the goal is not to be mean. There but for the grace of God go all of us. It’s easy to indict Republicans, it’s easy to indict show-business figures. It’s harder to be an equal-opportunity show. But we’re very concerned with giving the audience a varied plate. I guess I’m the sissy, the only woman of this partnership. I have more of a conscience--one could say a fear --of offending people.”

An example is then-President Ronald Reagan’s testimony before Congress on Iran-Contra. “After eight minutes of [Reagan repeating] ‘I don’t recall,’ you’re literally holding onto your sides; it’s just too funny,” Birnbach notes. “But then his Alzheimer’s was announced, and suddenly it’s not funny. It’s too painful, and it’s out of the show.” Because of the revue’s free-form structure, topical items--such as this year’s Packwood diaries--can be shuffled into the mix. There’s even the possibility of an all-O.J. show down the line.

The idea to turn society’s funny quotables into a theatrical piece took shape one day at Spy, when Andersen and Birnbach began acting out the notorious Charles-and-Camilla tapes.

“We realized it could be performed, not just read,” Malanowski recalls. With director Martin Charnin on board, they had their first staged reading in December, 1993; earlier this year, the show premiered at the Triad in New York. Following that successful run, “Loose Lips”--the book--was published by Simon & Schuster. The West Coast premiere will reunite Charnin and his six-person New York cast.

Co-creator Andersen, now editor in chief of New York Magazine, believes that some of these pieces really come to life on stage. (Conversely, Woody Allen’s meandering child-custody testimony made the book, but not the show.)

“Instead of the famous sound bite, you get the whole thing: like hearing the Beethoven chord, then hearing the whole symphony,” he says. “But my favorite thing is seeing them performed: real, unchanged words--so foolish, so embarrassing, so ridiculous--inherently funny, because they weren’t meant to be. They’re like found objects, like pop art. It’s taking things people said and recontextualizing them, putting them in a theatrical setting, and forcing [audiences] to scrutinize them in a way they haven’t been before.”

Andersen’s favorite pieces include L.A. Dodgers manager Tommy Lasorda yelling at a pitcher in a World Series game that was miked but not broadcast. “Every other word is [expletive]. He says it a million times, finally runs out of words. There’s also one piece like a Mamet comedy, a bunch of prissy killers [East Coast Mafia figures caught on an FBI wiretap] talking about tablecloths and where to put the salad. I also get goose bumps from the three tobacco executives being deposed: ‘I’m not aware that tobacco causes cancer.’ It’s chilling, morbid, and very funny.”

Although the occasional female voice does surface, it is notable that most of the subjects in the show are male. “Certainly there’s a reflection of more men being in power,” Malanowski says. “So they’re in more of a position to be taped, and to make fools of themselves.”

“LOOSE LIPS,”Santa Monica Playhouse, 1211 4th St., Santa Monica. Dates: Opens tonight. Plays Thursdays and Fridays, 8 p.m.; Saturdays, 7 and 9:30 p.m.; Sundays, 5 and 7:30 p.m. Special performance Monday at 8 p.m. Through Jan. 14. Price: $25. Phone: (310) 394-9779, Ext. 1.