Ralph Nader's Health Research Group yesterday asserted that after intervention by Rep. George H. Mahon (D-Tex.), the Occupational Safety and Health Administration discontinued inspection of cottonseed oil mills.

Mahon comes from Lubbock, a center of the cottonseed oil industry. He is chairman of the House Appropriations Committee and its subcommittee with jurisdiction over OSHA.

The Nader group charged that a former director of OSHA, after a meeting with Mahon, instructed regional agency officials to stay away from the mills.

Mahon yesterday acknowledged arranging two meetings, in 1973 and 1975, with mill owners' representatives, but said they were "all straight-forward and aboveboard." He said he had not asked OSHA to cease inspections of the mills.

The question first arose, according to the Health Research Group, in 1973 when OSHA was investigating mills because of suspected high levels of cotton dust believed to cause a respiratory disease known as byssinosis, or "brown lung."

The research group, relying on documents obtained under the Freedom of Information Act and other sources, gave this chronology:

On March 1, 1973, OSHA found violations of its cotton dust standards in a Fort Worth mill.

On March 5, arranged a meeting between OSHA's chief executive, Acting Assistant Secretary of Labor Chain Robbins, and the National Cottonseed Products Association.

On March 13, another OSHA official, Thomas C. Brown, wrote this memo to Robbins: "In order to be responsive to Congressman Mahon of Texas and the National Cottonseed Products Association, Inc., . . . I suggest this should be covered by a telephone conference to the regional administrators . . . Cottonseed oil mills will be a low priority for inspections except for fatalities, catastrophies and complaints."

On March 22, a Southern OSHA official took this telephone message from Robbins: "Cottonseed industry low - priority goal. Stay away from same."

Mahon said yesterday he arranged the March 5 meeting after industry officials told him OSHA had no evidence the cotton dust was a health hazard. He said they objected to being required to make extensive changes in their plants, or possibly having to build new plants, when there was no scientific evidence to show a hazard.

"We met with Robbins and it seemed to be agred that they didn't have any evidence," Mahon said.

"They [the industry] weren't asking for a general exemption [from OSHA regulations] but they didn't want to go to the expense of meeting the cotton dust standards without seeing evidence to back it up." Mahon said he had not asked OSHA to keep its inspectors out of the mills.

Robbins, who is now in private industry, had no comment yesterday.

In 1975, under prodding from another OSHA official, Barry White, the agency renewed inspections of cottonseed oil mills, and at least $2,500 in fines resulted, according to the research group.

On March 19, 1975, Mahon met with then OSHA chief John Stender, who replied to him later in a memo: ". . . the OSHA area offices will inspect only in textile mills in regard to the raw cotton dust standard. No cottonseed oil mills or mattress factories will be scheduled for raw cotton dust inspections. No process that handles linters will be inspected for raw cotton dust. All citatins and contested cases have been withdrawn."

Mahon ackowledged attending the meeting with Stender and industry representatives in his capacity as congressman from "a big cotton-producing district." He said Stender was impressed with their arguments that there was no scientific evidence that the dust caused "brown lung."

"I never asked OSHA to stay away from the cottonseed oil mills," Mahon said. "The only thing that was agreed was that there should be no standards unless it was proved necessary to go to this additional trouble. It was all straightforward and aboveboard."

The Health Research Group also reported that last Oct. 19, Mahon received a $500 campaign contribution from Dixon White, president of the Lubbock Cotton Oil Co.

Mahon said White was a close friend, "I don't recall the contributed to my campaign," he added.