In the midst of the Iran-contra investigation, it is sobering to be reminded that scandals involving the intelligence community have a tendency to remain muddled and unresolved. Former presidential aide Douglass Cater's reminiscence of the 1967 CIA-National Student Association affair {"What Did LBJ Know and When Did He Know It?" op-ed, July 19} illustrates the point.

Mr. Cater recounts the unraveling of the first major CIA scandal -- the agency's covert funding of the National Student Association -- and President Johnson's response. In so doing, Mr. Cater perpetuates the myth that the CIA's covert support was a benevolent and innocent attempt to facilitate American student participation "in the world's discourse." Mr. Cater claims that the ensuing investigations turned up no evidence that the CIA "sought to subvert NSA's policies" or that the agency "demanded a quid pro quo from those subsidized." Those assertions are a serious misstatement of the facts.

In a statement issued at the time of the controversy, NSA's supervisory board revealed that the CIA "may have attempted to influence the selection of {NSA} officers" and that association officials "issued reports and made available to the Agency . . . NSA documents and files on political situations and personalities in the international student world."

The 1976 report of the Church Committee corroborated the association's allegations. The Senate committee concluded that the secret funding was "a vehicle for the agency to identify new leaders and to promote their candidacy for elective positions" in NSA. The committee also confirmed that there were "instances in which the CIA moved from blank-check support to operational use of individual students." Such "operational use" included "covert action" and "clandestine intelligence collection (espionage)."

The true nature of the CIA-NSA relationship was more recently confirmed by the agency's defense in a Freedom of Information Act lawsuit seeking disclosure of CIA files concerning the association (I represented the U.S. Student Association in this FOI litigation). The agency successfully opposed disclosure on the ground that release of the information would reveal "intelligence sources and methods."

DAVID L. SOBEL Washington