High-level Nuclear Regulatory Commission officials covered up for almost three months knowledge that a geologic fault existed under a nuclear power plant the Virginia Electric and Power Co. was building at North Anna, Va., the Justice Department said yesterday.

Releasing the results of an investigation of the 1973 incident, the department characterized the Nuclear Regulatory Commission's actions as "ill-considered and inept and . . . as demonstrating a pervasive bias against the scrutiny which a project of the importance deserves and is entitled to under federal law.

The investigation uncovered several instances in which Vepco altered documents or made misleading statements on occasions that would have otherwise allowed the fault's existence to become known before it did, on Aug. 6, 1973, according to an internal Justice Department memo made public under a Freedom of Information request.

The May 11, 1977, memo from Bradford F. Whitman, assistant chef of Justice's Pollution Control Section, concluded that it would be futile to try to prosecute Vepco for concealing information about the fault because "Vepco would call as witnesses virtually the entire Office of Regulation of the Nuclear Regulatory Commission to testify that they were well aware of the fault and had determined not to take any immediate action to halt construction or to reopen the hearings" (on the project.)

"We would have a much stronger case against Vepco but for the actions of the NRC in sanctioning the continued construction by Vepco and concealing on its own part from the Atomic Safety and Licensing Board the discovery of a fault," the memo read.

The commission, estanlished in 1975 to oversee the construction operation and safety of nuclear plants, had been notified of the fault existence in a phone call from Vepco on May 17, 1973 the memo said.

"Wew were stunned to learn at this late date that knowledged of the fault had gone far beyond the technical staff level," the memo continued.

Three Nuclear Regulatory Commission staff members, including project director Robert Ferguson, visited the North Anna site about 80 mile southwest of Washington on June 18, one month and one day after the phone call, and observed the fault, the memo said. Asked by Vepco officials there whether there was any need to halt construction, a team member identified only as Mr. Hauser, a geologist from the U.S. Geological Survey, "replied that he was satisfied and they could go ahead."

Ferguson's report of that trip was placed in a public document room but no action was taken, the memo said. Ferguson then reported orally at a meeting involving John O'Leary, then director of nuclear reactor regulation and now head of the Federal Energy Administration, and several other top NRC officials.

The officials discussed whether to formally motify the Atomic Safety and LIcensing Board, the final authority on nuclear plants, which was considering North Anna permit applications at the time. They also discussed whether to ask that hearings be reopened, but it was decided merely to submit an affidavit as an addition to the existing record, the memo related.

Edward Case, then deputy director of nuclear reactor regulation and now acting director, "felt it was premature' to request that new hearings be held," the memo continued. It quoted former Nuclear Regulatory Commission staff attorney David Kartalia as telling the Justice Department "that Case was interested primarily in avoiding further delay in the construction permit and that his view ultimately prevailed."

O'Leary said the licensing board should be notified but did not secify how, the memo said.

The affidavit emerged from "additional high-level discussions" and said the fault was not thought to be dangerous.No request for further hearings was made. The affidavit was filed on Aug. 3, 1973. Three days later a local Virginia newspaper broke the story of the fault's existence.

An NRC spokesman said there would be no comment on the memo until officials had read it.

The memo went into considerable detail about Vepco's alleged actions to avoid public disclosure of the fault between April 24, 1973 when solid evidence of it turned up, and Aug. 6. Word of the discovery spread quickly through the company "All Vepco personnel have testified that discovery of the feature was not considered routine but rather a matter of some urgency," the memo said.

(KEY OFF)(KEYWORD)t a public hearing during May 7-10, 1973, power station engineering manager W. C. Spencer testified to the truth and accuracy of a preliminary safety analysis report that said geologic faulting at the site "was neither suspected nor known."

During this period, expert geologists disagreed on whether there had been land movement at the site, but decided on May 14 that a fault did exist. The next day, Vepco president T. Justin Moore was advised, the memo said, and the NRC was called three days later.

That phone call, however, from Ashby Baum, manager of licensing and quality assurance, advised the NRC that the fault had been discovered May 11, the day after the conclusion of the public hearing.

"This was a fraud on the public," said Whitman of the Justice Department, in a telephone interview. "They went down to that hearing and were told everything was hunky-dory and listened to all the testimony about water quality, and the issue that should have been brought up was earthquakes."

Vepco had been told earlier by the NRC to submit amendments to its final safety analysis report on other problems the plant had. Drafts of this "amendment 20" from the Stone and Webster consulting firm did not alter the statement in the earlier safety analysis that "faulting is neither suspected nor known."

Later on, Vepco engineer Clifford Robinson, assigned to the North Anna project, deleted other parts of the proposed amendment that referred to "minor shearing" at the site. "Best not to say anything at all about it now," he wrote, noting that it would be covered in an August report.

Vepco further did not file its customary written confirmation of the phone call that advised the NRC of expected interim report. According to a Ribinson memo, "submission of report will hold up CP," or the construction permit.

"Vepco personnel did not want the discovery of the fault to be leaked to the public before they had conclusively determined that the fault was minor, ancient, and of no signicance to the project," the Justice Department memo said.