October 29, 1985

The four candidates for Nassau County Executive clashed yesterday over the role of county government in the management of the Long Island Lighting Company, the future of the utility's nuclear power plant and political contributions by county employees. During a one-hour debate at The New York Times, Francis T. Purcell, the Republican incumbent, and his Democratic challenger, John W. Matthews, were cordial, but on several occasions they engaged in heated verbal sparring. They agreed only that they did not approve of the way Lilco was being managed, but they differed sharply on whether the county government should force a replacement of the top officers at the utility. The Liberal Party candidate, Jack Olchin, said he strongly supported the Shoreham nuclear plant, while Dr. Raymond J. Vuolo of the Right to Life Party said the importance of the issue had been exaggerated.

The Chrysler Corporation today reported record earnings for the third quarter of $316.2 million, or $2.75 a share, up 21 percent from $261.6 million, or $1.88 a share, in the comparable period last year. It was the eighth consecutive quarter of record earnings for the nation's third-largest auto maker. The Chrysler report brings the combined earnings of The Big Three to $1.15 billion for the July-September period. But for the General Motors Corporation and the Ford Motor Company, the high cost of incentive programs in the form of low financing rates produced declines in operating income. G.M., the industry giant, actually lost money on its car-making operations.

John A. Walker Jr. pleaded guilty today to charges that he spied for the Soviet Union and that he recruited his son, friend and brother into an espionage operation that the authorities have called one of the most damaging in American history. Under a plea agreement approved by a Federal judge today, Mr. Walker admitted his role in the spy ring and is to be sentenced to life in prison. In return, the judge agreed to a reduced prison term of 25 years for his son Michael L. Walker, a Navy yeoman who faced up to two life sentences and more than $500,000 in fines. Will Give Complete Account Mr. Walker, a retired Navy communications specialist, told Federal District Judge Alexander Harvey 2d that he would give Government investigators a complete account of the material that he and his associates delivered to the Soviet Union in 17 years of espionage. He also agreed to testify in other cases, including the trial of Jerry A. Whitworth, a retired Navy radioman described as Mr. Walker's closest friend, who is charged with stealing secrets that were delivered to Soviet agents.

Markets Phibro-Salomon is cutting back its commodity trading unit, Philipp Brothers, for the second time in a year. About 600 jobs will be lost, and two men in their early 30's who made their mark in sugar trading will become Philipp's chairman and president. Phibro-Salomon will change its name to Salomon Inc. [Page D1.] A flood of Treasury notes and bonds will be unleashed beginning today when the Treasury starts a three-part financing totaling $17.75 billion. The size and hasty schedule surprised dealers and helped reduce bond prices by more than a half-point. [D22.]

Merrill Lynch & Company, parent of the giant financial services organization, yesterday reported a 52 percant drop in net income for the third quarter despite a 5.4 percent increase in revenues. Net income fell to $38.4 million, from $80 million in the third quarter of 1984. Weak stock market volume in the latest quarter hurt Merrill, just as at other brokerage houses.