For three years, Rep. Daniel J. Flood (D-Pa.) regularly accepted thousands of dollars in cash stuffed into white envelopes in exchange for helping the Virginia-based Airlie Foundation obtain federal grants, Flood's former administrative assistant testified yesterday.

Stephen B. Elko described an elaborate triangular relationship in which Dr. Murdock Head, the foundation president, would summon Elko when in need of Flood's intervention and then carefully hand over the envelope using facial tissue to avoid leaving fingerprints.

Elko, code-named "Malik" under the scheme, said he would then deliver the money to Flood, code-named "The Moustache" or "Mandrake," in Flood's Capitol Hill office. In addition to these payoffs, Elko said that every September for three years, Head would give Flood $1,000 in "taxi-fare" to get him to an annual Airlie banquet.

"'Keep in mind, Steve, that this is a business,'" Eldo recalled Flood saying when he joined the congressman's staff. "'If you handle this the way I know you can, the rewards will be there for both of us.'"

Elko's testimony came during the first day of Flood's trial on bribery, conspiracy and perjury charges in U.S. District Court here.

The 75-year-old House Appropriations subcommittee chairman is alleged to have taken more than $65,000 from people seeking government favors, including $28,000 from Head.

In Flood's defense, his lawyers argued yesterday that the congressman had taken no bribes from anyone but was the victim of a preplanned frameup by Elko. Elko, said defense lawyer Axel Kleiboemer, operated on his own to take bribes and influence the government agencies.

When Flood himself did intervene, it was on Elko's advice and without the knowledge that bribes had been paid, Kleiboemer said in his opening statement.

Elko, who testified under a grant of immunity, is serving a three-year prison term for his role as an intermediary in another alleged bribe scheme involving Flood.

Government prosecutor David Hinden said he would prove -- with Elko as the chief witness -- that Flood used his influence in exchange for bribes from a wide variety of businessmen, including a West Coast vocational school operator, a housing developer, bankers in his home state of Pennsylvania, a New York rabbi, and a manufacturer of prefabricated housing who sought to sell some to the government.

Elko, in each instance, was allegedly the intermediary. "If you want to inspire the congressman's interest," Elko said he told one favor seeker, "you have to come up" with money.

Dr. Head, a prominent Washington physician, now the target of a grand jury investigation in Virginia, has consistently denied any wrongdoing.

The Airlie Foundation, which he heads, occupies 2,000 acres of pristine farmland outside Warrenton, Va. Equipped with a helipad, landing strip, recreational facilities and a conference center, the foundation seeks federal grants to stage conferences and seminars.

It was his concern for the continuation of those grants that first prompted Head to strike up a friendship with Elko, Elko testified.

Flood is chairman of a subcommittee that exercises substantial influence over the spending of various government agencies, including the departments of Labor and Health, Education and Welfare.

After inviting Elko to Airlie "to do a little fishing and look at the birds," Head first broached the subject of getting Flood's help in 1971, Elko tesfied. Head

old me he just wanted to be acknowledged by me or Mr. Flood if anyone calls from an agency" and asks about the Airlie Foundation, Elko said.

Elko said Head "picked up an envelope from his desk with facial tissue and said: 'Make sure you give this to Congressman Flood.'" The envelope contained $5,000 in hundred-dollar bills, Elko testified.

"I put it is my pocket and headed back to Washington," Elko said, where he than waited for Flood to come off the House floor to give him the money in his private office.

"'What's it for?'" Elko recalled Flood asking him.

"He [Head] just wants us to acknowledge him if someone calls," Elko told Flood.

"The congressman put the money in his pocket," he added.

As the relationship continued, Elko testified, the requests from Head got more specific. He wanted help getting money from the Office of Education, the witness said, and he wanted help getting more money on better terms from the Agency for International Development. He wanted Flood to intercede with Rep. Otto Passman of Louisiana to bring pressure on AID and gave Elko money which, he testified, he funneled to Passman to accomplish his goal.

Elko, Flood and Head established a regular routine, Elko said, which was repeated with each request from Head. Head would telephone Elko. Elko would drive to Airlie for a private meeting with Head. Head would state his problem and then hand over the money, always using facial tissue to avoid fingerprints. "I kidded him about this facial tissue business. He said he didn't want any fingerprints," Elko testified.

By the fall of 1974, the investigative climate fed by the Watergate scandal began to make Head nervous, Elko said, and the relationship ceased with one bizarre scene in Head's office.

"He had a large flip chart with sheets of paper on it," Elko said of Head. "He wrote on the paper that he was afraid of electronic surveillance.

"Then he wrote: 'We have to be careful. The long knives are out. I'm going fishing for about a year. The cannonballs are flying and you'd better duck.'"

Elko then did some writing on the flip chart himself. "'What about the money?'" Elko wrote.

"'How much?'" wrote Head.

"'Fifteen thousand dollars,'" Elko wrote.

"'Too much,'" responded Head. "'Five thousand.'"

The two ultimately settled on $8,000, which Elko split between himself and Flood, Elko testified.

In addition to these payoffs, Elko said that each September, Airlies said that each September, Airlie Foundation held a Statesmen of Medicine award banquet at which Head sought Flood's presence. The $1,000 "taxi fare," as Head described it, helped obtain it, Elko said.