President Packer first uttered the statement back on August 22nd, 1981 during a talk entitled "The Mantle Is Far, Far Greater Than The Intellect", delivered to Church Educational System (CES) educators at Brigham Young University-Provo. The specific occasion was a CES symposium on the Doctrine and Covenants and Church History. President Packer's interest in this issue was prompted by his early work with CES, when he found that a number of teachers had become wholly secularized, leading to confusion by and substantial problems for teachers and students. The full 11-page address is available for free at THIS LINK. Here is the statement, embedded in context:
"There is a temptation for the writer or the teacher of Church history to want to tell everything, whether it is worthy or faith promoting or not. Some things that are true are not very useful."
According to the Mormon Mission blog, President Packer discussed four cautions:
1. There is no such thing as an accurate, objective history of the Church without consideration of the spiritual powers that attend this work.
2. There is a temptation for the writer or the teacher of Church history to want to tell everything, whether it is worthy or faith promoting or not.
3. In an effort to be objective, impartial, and scholarly, a writer or a teacher may unwittingly be giving equal time to the adversary.
4. The final caution concerns the idea that so long as something is already in print, so long as it is available from another source, there is nothing out of order in using it in writing or speaking or teaching.
According to FairMormon, President Packer was not speaking to Mormon historians, but to CES employees. CES employees are not hired to provide a so-called "fair and balanced perspective" on Church history and doctrine, but to provide faith-promoting education by teaching LDS doctrine and promoting faith in its young people. Why would the LDS Church be obligated to give equal time to the opposition on their own flagship campus? One would expect the LDS Church to teach religious history in its seminaries and institutes, which is distinct from secular history. President Packer also pointed out that the historian or scholar who delights in highlighting the weaknesses and imperfections of present or past leaders in the name of so-called "transparency" destroys faith, and that a destroyer of faith -- particularly one within the Church, and more particularly one who is employed specifically to build faith -- places himself in great spiritual jeopardy. Furthermore, the problem with these "true" statements is not that they're not true, but that they're used in such a way or context as to give a misleading or even false impression. Church history can be as misleading as gossip and much more difficult, often impossible to verify. President Packer's concern was strictly with what happens in Church institutions, not with what happens in non-Church venues in which historians may participate.
The passage of time has not changed President Packer's mind. In July 2007, the LDS Church published the transcript of an interview he gave to PBS for their documentary The Mormons in which he reiterated this principle (HW is Helen Whitney, the interviewer):
HW: Is there a conflict between a faith-promoting work of scholarship and factual scholarship? Is there a conflict at all?
BKP: There can be. Some things that are true aren’t very useful. And there are those in the past who have looked at the leaders of the Church, for instance, and found out that they’re human and want to tell everything. There are steps and missteps that don’t help anything. Some think that to be totally honest they have to tell everything. They don’t. If they’ve got the mindset for that, then they’re always grumbling — they have an appetite for it. They’re free to do that, but it isn’t really productive, it doesn’t really make anybody happy.
Someone you knew, say when you were in college, made a terrible mistake. You knew about it, and it was forgiven and lived beyond. There’s little purpose in going back and digging that out and speaking of it when their children might be present — a lot of things that are true historically aren’t very useful and don’t generate happiness.
The second part of this excerpt is important, because it addresses the tendency of the elite to crucify public figures in the media for past indiscretions. What value is derived from dredging up a past indiscretion from which an individual has long since repented? The only purpose such "transparency" can serve is to divide and polarize. Our national obsession with race is an example of this problem; why do some LDS members continue to obsess with the Priesthood ban against blacks when it was resolved in 1978 and we know through revelation that all those who were denied the Priesthood through no fault of their own will be offered it in the spirit world? Either one believes it, or one doesn't. And if one doesn't, is it really wise and productive for one to hold an entire 15 million member church hostage to one's lack of faith?
President Packer was not trying to suppress truth. He merely wants the Church Educational System to fulfill its primary mission -- to help grow faith and develop testimonies. Controversial Church history can be discussed in other venues, in other ways, and at other times. The LDS Church has sought to allay the historical doubts of members by publishing a series of essays about historical events which are more forthcoming than in the past, so the Church clearly has no desire to "cover anything up".