''The Soviets,'' says the bespectacled round-faced man who looks more like a stockbroker than America's top spy, ''got virtually a free ride on all of our research and development.''
He's talking about secret agents - from the Soviet bloc. And, he says, they plundered America's technological secrets because our own spies weren't watching them.
The speaker is William C. Casey, the director of the Central Intelligence Agency and coordinator for all intelligence gathering for the United States. He indicates that things are likely to become much tougher for the Soviets in the world's intensifying spy wars if he has his way.
After years of controversy and cutback, America's spies are finally getting a break.
The Reagan administration is putting more money and manpower into the business of spying, and into countering Soviet bloc spies both at home and abroad.
Exact figures on recruiting for the spy trade and on the money spent on the intelligence agencies are kept secret. But it is clear that after years of decline, spying is now a ''growth industry.'' One of the few government institutions which is hiring new employees in this time of recession is the US Central Intelligence Agency.
In the view of some experts, the effort comes none too soon.
''We've got to strengthen HUMINT,'' says one of the experts who has access to sensitive intelligence reports, speaking in the peculiar argot of professional spies. He means ''human intelligence gathering''.
''Our SIGINT (signal intellegence) and photo intelligence are among the best, but in HUMINT . . . we're lucky if we're among the top 10.''
The Reagan administration took power some 21 months ago determined to strengthen intelligence collection, analysis, and operations, and the dozen agencies that make up what is known in the trade as the ''intelligence community'' are benefiting.
Take the Federal Bureau of Investigation, for example. According to one high-ranking intelligence officer, FBI money and manpower was once stretched to the point where the bureau had to stop surveillance of certain known Soviet spies, who, together with European surrogate spies, were operating in an increasingly sophisticated and aggressive manner in this country.
The FBI has become increasingly concerned over the loss to Soviet spies of American high technology information. Although precise figures are closely guarded, it is now clear that the FBI is getting more in way of resources to conduct a more aggressive counterespionage program.
Mr. Casey argues, however, that the intelligence agencies are not so much increasing their budgets as they are building back to where they were before they got cut during the 1970s.
In a more than hour-long interview with the Monitor, Casey said that because of these cuts in money and manpower, intelligence reporting on an increasingly turbulent third world and on a variety of other problems had been drastically reduced. According to Casey, major intelligence analyses, known as ''national estimates'' often failed to cover third world developments.
''For seven or eight years, there was a drawdown in personnel and funds,'' said Casey, as he leaned back in his chair for an interview in his seventh-floor office at the CIA headquarters in Langley, Va. ''We lost 50 percent of the personnel and 40 percent of the funding.''
''During the 1970s, with pressure on budgets and people and having to keep up with Soviet weapons for arms control purposes, there was a very substantial - an amazingly large - reduction in our coverage of the third world and other types of problems,'' he continued. ''So, without going into details, you can say resources are building back.''
Casey said that in the late 1970s, the intelligence agencies' national estimates had to be concentrated on ''absolutely essential things,'' such as the NATO-Warsaw Pact military balance and the Arab-Israeli conflict.
''But otherwise, there was very little done on the Middle East, nothing on Latin America, nothing on southern Africa,'' said Casey.
''Today we are producing estimates on subjects which had been neglected for the better part of a decade, plus some significant new subjects which had not been addressed in national estimates,'' said the CIA director, whose desk was covered with an array of reports in a variety of folders. ''Terrorism and narcotics, for example.''
''The whole subject of instability has received inadequate attention. We have established centers to study the questions of technology transfer, insurgency and instability, and Soviet espionage and disinformation activities. . . ''
Casey said that national estimates had dwindled from an annual average of 51 in the late 1960s, down to 33 in the early 1970s, and 12 in the six years from 1975 through 1980. With the advent of the Reagan administration in 1981, production jumped. There were 38 national estimates in that year. This year, 60 or more such estimates are to be completed.
In addition to having increased production at the CIA, Casey claims to have made intelligence reports to the President and other policymakers more timely.
''We now have a weekly watch meeting report to protect against military or political surprise,'' he said. ''For many years, the CIA intelligence process revolved around a weekly watch report. In recent years, there were only regular warning meetings on a monthly basis.''
But Casey has also ended the practice established by several of his predecessors of making public certain sanitized, unclassified analytical reports. Some maps and economic statistics continue to be released. But the halt in publication of analytical reports has made it more difficult for an outsider to judge the quality of CIA reporting.
For example, in the interview Casey said that reporting on events in Poland had been good and that as a result, US policymakers knew that the Polish authorities would invoke martial law. In a separate interview, Bobby R. Inman, the former deputy director of the CIA, supported Casey's statement on the coverge of Poland. But other sources added that while the agency was correct about martial law, it both underestimated the efficiency with which the Polish authorities would crack down and overestimated the amount of resistance which they would meet from the Solidarity trade union movement.
When President Reagan first appointed Casey to his job as ''intelligence czar'' nearly two years ago, there were fears among intelligence officers that he would ''politicize'' the process by twisting reports to fit preconceived ideological notions. Some officers also feared yet another massive reorganization, or worse yet, a purge.
But with the exception of his ill-fated and much criticized attempt to appoint his friend Max Hugel to at top CIA post, Casey has stuck for the most part with professional intelligence officers. CIA analysts of Soviet affairs who were earlier accused by outside experts of underestimating Soviet nuclear weapons capabilities were, in the words of one top intelligence officer, ''forgiven.''
Two experts with access to intelligence reports, who were interviewed by this reporter, said that Casey, contrary to some expectations, had shown a willingness to change his opinion when confronted with facts which contradicted that opinion. Officials said that Casey was also willing to highlight for the President disagreements among the intelligence agencies, rather than turning them into mere footnotes to his own conclusions.
When it comes to both technical and human intelligence gathering, the difficulties of penetrating Soviet secrets are made clear in a book being published Oct. 29 by the National Strategy Center Inc. In the preface to the book, entitled ''Intelligence Requirements for the 1980s: Clandestine Collection ,'' the center's president, Frank R. Barnett, declares that ''The task of penetrating through the layered defenses of modern despotism is formidable.''
''The secret is no longer wrapped only in an enigma'' says Mr. Barnett, paraphrasing Winston Churchill's famous description of the Soviet Union as a riddle wrapped in an enigma. ''It is rolled up in iron curtains, electronic curtains, and computer shields.
''It is shrouded in the smog of fear engendered by central wiretapping. It is smothered under security blankets of almost totally all-pervasive intelligence services.''
Roy Godson of Georgetown University, editor of the new book, notes that the recruiting and running of agents in the Soviet Union, while not impossible, requires the utmost skill and that the Soviets themselves have developed great skill in ''doctoring'' the information that does get out.
In the developing nations, Dr. Godson notes, many struggles are occurring where the US lacks operatives skilled in languages or cultures. Few Americans have become expert, for example, about the Arabian Peninsula, the Persian Gulf, or central and southern Africa - the latter of which is described by Godson as the ''the mineral Persian Gulf'' of the 1980s.
''The normal difficulties in recruiting and running HUMINT sources have been exacerbated recently because the US is no longer perceived as the prospective winner in the world struggle for power,'' says Godson.
''While US society may be much envied,'' says Godson, ''very few foreign elites or members of the attentive public appear to believe that the US is going to emerge as the dominant force in their region or even that the US will have the capability to protect its friends and interests in their region.''
Godson further argues that American code breakers may have to anticipate that many third world coding systems will become more sophisticated and ''far less easy to read'' in the future unless they can obtain the code keys, probably through the use of human agents.
From the same book, further food for future thought:
* Adm. William Robertson, a former director for production of the Defense Intelligence Agency, maintains that the US data base on third world nations, particularly where the US rapid deployment force might be utilized, is woefully deficient.
* William J. Schneider, an undersecretary of state, responsiblefor defense and intelligence systems, contends that the technical collection systems, such as satellites, are not growing in performance as quickly as their costs. The increasing costs, he says, are squeezing out other important intelligence activities.