A former chief of the Small Business Administation testified yesterday that within weeks of his appointment to head the agency in 1982, he was lobbied by the White House and former Reagan aide Lyn Nofziger to give the Bronx-based Wedtech Corp. a multimillion-dollar minority business contract.

Denouncing the Wedtech scandal as a story "of greed run amok," former SBA administrator James C. Sanders said a high-ranking Reagan White House aide, James Jenkins, urged him that spring to steer the work to Wedtech in line with President Reagan's desire to generate employment in the economically devastated south Bronx.

"On the face of it, that seemed then, as it does now, a worthwhile objective," Sanders told a Senate Governmental Affairs subcommittee. "Jenkins said the White House was interested in seeing something happen in the south Bronx . . . and it appeared that Wedtech was the only one that could do it."

Sanders said the meeting in late April or early May 1982 in Jenkins' White House office was the only time Jenkins contacted him on that or any other subject.

"Did you know Mr. Jenkins was Meese's deputy?" Sen. Carl Levin (D-Mich.), the subcommittee chairman, asked. (Attorney General Edwin Meese III was then counselor to the president.)

"Oh yes . . . I was quite confident Mr. Meese knew what he {Jenkins} was doing," Sanders replied. But he said he was more impressed by the allusion to Reagan's wishes than anything else.

Around the same time, Sanders testified, that he was invited to lunch at Nofziger's town house office on New Hampshire Avenue. The purpose of the May 3, 1982, lunch was to talk about Wedtech with Nofziger and his new partner, Washington consultant Mark Bragg.

"I had been administrator for about 15 days," Sanders recalled of the efforts to secure a no-bid Army engine contract for Wedtech despite Pentagon opposition. "I considered, because of the prominence of Mr. Nofziger, that it would be useful to do that."

Wedtech got the $32 million contract, and inside track to more, following a May 19, 1982, White House meeting at which Jenkins presided and which Sanders' top deputy, who attended, described in testimony Wednesday as unprecedented.

Today, with the company in the process of liquidation, Nofziger and Bragg are awaiting trial on federal conflict-of-interest charges. Meese is under investigation for the role he may have played.

Levin said the political influence Wedtech acquired before its financial manipulations and other corrupt activities were exposed by a series of state and federal investigations was "nothing less than incredible." He said consultants "landed on Wedtech like flies on honey and helped suck it dry."

Sanders, who became a key advocate for Wedtech before leaving SBA in March 1986, said his feelings went "beyond disgust." He said he is amazed that the now-bankrupt Wedtech managed to get so far before being caught.

"I think even those that advised me had been deceived," Sanders said. "I think there was a coverup of the true financial condition of the company . . . . I suspect a number of people were paid off to cover up information, disguise it and distort it."

Sanders was referring to early 1984 when he helped Wedtech get $134 million in no-bid Navy pontoon contracts, biggest SBA award in history, despite the fact that the supposedly disadvantaged company had just raised millions of dollars in a public stock offering. It was the only time an SBA-qualified minority-owned business had gone public.

Under harsh questioning by Levin, SBA lawyer David Elbaum, then in the agency's New York office, testified that on Jan. 5, 1984, he approved an arrangement under which other Wedtech executives purportedly transferred enough stock back to Hispanic founder John Mariotta to maintain its minority status, even though Mariotta never got possession of the stock and never paid for it.

Elbaum, who called Wedtech "politically well-connected," made his finding after a hurried 1 1/2-day review on instructions from then-regional SBA administrator Peter Neglia. He said Neglia told him "it had to be fast" because "there was a conference occurring in Washington" about another contract for Wedtech that could not move forward until the dispute was settled.

On Jan. 25, 1984, at a meeting Sanders attended, Navy officials were told Wedtech was the SBA's candidate for the pontoon contracts.