In the wake of the controversy over J.H. Hatfield's "Fortunate Son: George W. Bush and the Making of an American President," Robert B. Wallace, editor in chief of St. Martin's Press, resigned yesterday.

Wallace's sudden departure is the latest in a bizarre series of events surrounding "Fortunate Son," which was released Oct. 19 and recalled by St. Martin's last week after the publishing house discovered that Hatfield is apparently an ex-con who once plotted the death of his ex-boss. The book makes allegations of cocaine use by Bush that have not been substantiated.

"I didn't want to be associated with a book I have no control over," Wallace said from his home. "I haven't even read the book."

At the center of the story are some very basic questions about the way book publishers in America vet the credentials of their authors and check the facts of the works they produce.

Given how much time publishers take to produce a book after it is written--almost a year in many cases--publishing debacles are memorable, including tainted books about Hitler, John F. Kennedy and Howard Hughes.

Many of the top-level publishing houses, including St. Martin's Press, routinely conduct legal reviews of books. But the standard contract between writer and publisher places the burden of proof squarely on the writer--for libel, for plagiarism, for factual errors.

"Fortunate Son," said St. Martin's spokesman John Murphy, was "given a legal reading." He said the company's in-house counsel hired the Washington-based firm of Levine, Sullivan and Koch to do a legal examination of the book, including the potentially explosive charges--denied by Bush and his family--that the Texas governor was arrested for possession of cocaine in 1972 and performed community service as punishment.

The legal scrutiny "was done well in advance," Murphy said. "This was not a rush job."

"What happens," said one literary agent who has done business with editors at St. Martin's Press, "is that too many publishers sign up too many books by too many authors with no credentials, no track record and no threshold of credibility. Some publishing houses take a proposal that seems to be newsy or titillating or shocking and they figure that the person knows how to write and it might result in some sales and so they sign it up."

Murphy said Hatfield was unavailable for comment. Hatfield posted a reply to the charges on the Drudge Report Web site. "When an author writes about the current governor of Texas and the front-runner for the U.S. presidency (whose father happens to have been the former director of the CIA and the president of the United States)," Hatfield wrote, "it is amazing how quickly the smear campaign and character assassination efforts can be mobilized."

In his online reply, Hatfield said he had been forced to take his wife and young daughter into hiding. He reiterated that his reporting of Bush's cocaine arrest was based on "the informed, but confidential testimony of three sources close to the Texas governor." But he does not talk about his denial to St. Martin's of being the man who was convicted in 1988 of paying a hit man to car-bomb his boss.

Just before the book was published, Hatfield delivered an "Afterword" that contained the allegations about Bush's cocaine use. At St. Martin's, a warren of ancient offices in the Flatiron Building in Manhattan, the document was considered top secret and referred to only by the cryptic letters "MJ." It was also run under the legal microscope, Murphy said.

"The book came into us from a reputable literary agent," said Murphy. Hatfield "had published several books before." One was a biography of "Star Trek" actor Patrick Stewart.

The fact that the author might have a checkered past was "out of the realm of consciousness," Murphy said.

About 90,000 copies were printed. Some 70,000 were recalled; 20,000 were stored in a warehouse. The books, Murphy said, will be destroyed.

Some editors are meticulous about verifying the facts in the books they oversee. Jonathan Segal, a senior editor at Alfred A. Knopf, said he welcomes the legal review of the books he edits. "You want to show that you have made the best effort and that what you've published is solid, reliable, right."

Vetting, he said, "always uncovers something--whether there are problems or no problems, whether everything is nailed down."

"In our standard contract," Segal said, "the writer warrants that everything he says in his book is true. Most good writers are copious in their note-taking and are interested in protecting their reputation."

It is important, he continued, for an editor to really get to know the writer. But, he noted, "it's kind of hard to check on the character of the person you're doing business with."

Segal said he is demanding when it comes to the verification of facts. "In the early draft material, I like to see the backup on it. I ask for sources."

But, he added, "you do not want to create a climate of tension with the author."

Fact-checking "is an extremely difficult thing to do," he said. If a fact-driven book lands on his desk, he asks for a "copy editor who has a schoolteachery approach to the subject."

The copy editor, however, "is not required to make calls to check facts the way the New Yorker might."

"The fact-checking process at the New Yorker has been satirized as fetishistic," admitted David Remnick, the magazine's editor and a former reporter at The Washington Post. Remnick is also the author of several nonfiction books.

He said that whereas publishing companies mainly focus on the legal aspects of a book, his magazine goes overboard to check every jot and tittle. "Mistakes," he said, "still leak through the screen."

Scrutinizing magazine stories, Remnick said, "is very expensive to do. We have in the last six or seven years doubled the size of our fact-checking staff. It costs us hundreds of thousands of dollars a year."

Wallace, 48, who once worked for Rolling Stone and ABC News, has been editor in chief at St. Martin's for three years. He said the book was published under the imprint of Thomas Dunne, another editor at the company.

As is the custom at many large publishing houses, certain editors, such as Dunne, have so much clout they can command their own imprint. Dunne, Murphy said, has been at St. Martin's for 30 years. He chooses books he wants to publish.

He is the same Thomas Dunne who in 1996 was forced to cancel the publication of a biography of Nazi propaganda overlord Joseph Goebbels, written by Holocaust denier David Irving, after early reviews denounced the book as misleading and "repellent." In that case, Dunne claimed that he didn't know that Irving, an English historian, frequently lectured on the "hoax" of the Holocaust and had been convicted of violating Germany's law against Holocaust denial.

In his resignation announcement, Robert Wallace said, "I do not in any way wish to have my name associated with 'Fortunate Son' or future books published by Thomas Dunne Books."

Staff writers Marc Fisher and Howard Kurtz contributed to this report.

CAPTION: "Fortunate Son" was pulled from bookstores last week.