Mr. McMullan said that when he reported that there were deals being played out several blocks away, Mr. Millford asked if he could move one down to the White House because ''the President wants to show it could be bought anywhere.''

Asked today if he had requested a bag of crack for his speech, the President replied that he had. ''I said I'd like to have something from that vicinity to show that it can happen anywhere,'' he said. ''Absolutely. And that's what they gave me, and they told me where they caught this guy.''

The suspect, whom the drug agency did not identify, has not been arrested. Officials said they hoped he would lead them to more drug traffickers. A spokesman for the agency, Mario Perez, was quoted by The Post as saying a plan to arrest him this week fell through when he did not come to a scheduled meeting.

Asked if his aides had told him about the ''manipulation'' that would have to take place to procure the crack in Lafayette Park, the President said ''no.'' Police Spokesman Disapproves

But Mr. Bush said it did not matter whether the drug seller had been lured there, or whether he had given the impression in his speech that there was a serious problem with crack sales in Lafayette Park - something the local police have debunked.

''I don't think any neighborhood is free from selling drugs,'' he said. ''I mean, the man was caught selling drugs in front of the White House. I think it can happen in any neighborhood, and I think that's what it dramatized.''

But Gary Hankins, a spokesman for the city police union, said, ''It is never a good policy to mix politics with law enforcement because undercover operations by their very nature are dangerous enough, and you don't want to introduce any unnecessary variables.''