Liberty Lobby founder Willis A. Carto testified yesterday that he stands by assertions in the right-wing organization's newspaper that William F. Buckley Jr. had a "close working relationship" with American Nazi Party leader George Lincoln Rockwell and that Buckley's magazine, National Review, favored giving "militant sex deviates . . . the right to molest your children."

Carto also told a federal court jury here that he did not direct the author of the article linking Buckley with Rockwell to call Buckley for his reaction to the assertion because "it would have been a denial, and it would have taken more space."

Carto's testimony came during the trial of a $16 million libel suit filed by Buckley and National Review against Carto and Liberty Lobby.

U.S. District Judge Joyce Hens Green granted summary judgment in 1983 to Buckley and National Review on claims that they were libeled by statements in the group's newspaper, Spotlight, about the National Review's position on "sex deviates" and its assertion that the magazine was a "mouthpiece" of the Anti-Defamation League of B'nai B'rith.

The jury, which is hearing testimony about those statements to determine damages, also is considering claims by Buckley and National Review that they were libeled by the statements linking Buckley and Rockwell and by an assertion that National Review had printed a "muddled smear" of Liberty Lobby in collaboration with Rabbi Meir Kahane, former head of the Jewish Defense League.

In a session often interrupted by objections from defense lawyer Mark Lane, Carto outlined the basis for the various Spotlight statements.

He testified, for example, that National Review had encouraged "giving militant sex deviates . . . the right to molest your chlidren" by printing articles about "so-called gay rights."

"You're saying that if anyone advocates gay rights . . . that this will lead down the road to child molestation?" asked J. Daniel Mahoney, attorney for National Review and Buckley.

"Precisely. That's my opinion," Carto replied. "Anyone who can't see the results of this sort of irresponsible advocacy is not very smart," he said.

In support of Spotlight's assertion that there had been a deal between Buckley and the Anti-Defamation League "to smear patriotic groups out of existence," Carto said he was told of such an arrangement shortly before National Review became available at newsstands.

The Anti-Defamation League, Carto said, "control s all the newsstands in the country" as well as advertising in newspapers across the country.