The gauze of lies that the Soviet regime wraps around reality has never been thick enough to muffle this question: Where is Raoul Wallenberg?

Now it is asked again, in the wake of the most recent in a long series of tormenting reports. A Russian immigrant in Israel says that when he was hospitalized in 1972 on the way to prison, he met a man who "looked Jewish, so I asked who he was. He answered in accented Russian that he was Swedish and was there because he helped the Jews. He said his name was Raoul Wallenberg." That occurred a quarter of a century after 1947, the year the Kremlin says Wallenberg died.

Last May, when tardily releasing documents about the Wallenberg case, a Swedish official said, "We are working on the supposition that he is still alive." (Sweden's lethargy concerning the case-- lethargy born of cowardice--hardly constitutes "working.") If alive, he is 70. It is 38 years since he disappeared from Hungary into the Soviet Union.

On Jan. 17, 1945, he was seized by Soviet forces that were "liberating" Hungary from their former allies, the Nazis. Three weeks later he was in the emblematic institution of the Soviet regime, Moscow's Lubyanka prison.

At 32, representing neutral Sweden, Wallenberg was in Budapest at America's request, working with breathtaking bravery and saving scores of thousands of Jews from Adolf Eichmann's final chapter of the "final solution," the destruction of Hungarian Jews. He bought buildings and draped them with Swedish flags as diplomatically protected territory. He dressed "Aryan-looking" Jewish men in SS uniforms to protect Jewish havens. He distributed fake passports, and used sheer audacity to intimidate Nazi soldiers into opening the doors of cattle cars. Thanks to him, the 120,000 Jews in Budapest were the most substantial Jewish community surviving in Europe when the war ended.

One certainty is that Andrei Gromyko lied in the 1957 memorandum asserting that Wallenberg's "sojourn in the Soviet Union"--Gromyko's words-- ended with a heart attack in prison in 1947. This memorandum came after 12 years of Kremlin denials that Wallenberg had ever been in Soviet hands. Gromyko cited the evidence of two Soviet functionaries, both conveniently dead, and said the body had been cremated--a transparent fabrication, given Soviet practices.

There has been a steady trickle of reports about Wallenberg, first from returning German prisoners of war, then from released political prisoners and Jewish emigrants. The reports give dates and places--prisons, cell numbers--that trace a tantalizing trail across the years and through the gulags.

For example, in 1961 a Soviet professor of medicine told a visiting Swedish physician that he had recently examined Wallenberg in a "mental hospital." In 1977 a Muscovite just released from the gulag called his daughter in Israel and mentioned meeting in a Moscow prison a Swede "who had served 30 years." Two years later the Muscovite was back in prison because, his wife said, he wrote a letter about Wallenberg. Sources in Eastern Europe report that in 1981 Wallenberg was moved to a prison hospital near Leningrad.

Why was he arrested in the first place? The Soviet machinery of brutality operates so automatically it leaves little room for, and certainly does not require, much mind. But Soviet repressors certainly did not want brave witnesses to the breaking of Eastern Europe. Why was he kept? Perhaps, in part, to show contempt for Western disapproval. Why did Soviet troops using horses and ropes drag away the statue erected to him in Budapest in 1948? Because the Kremlin disapproved of what he did.

It is prudent that we insistently ask what happened when Wallenberg ended his dance of death with the Third Reich and fell into the hands of its moral twin. When the Soviet Union gets away with such acts--acts that are as contemptuous as they are contemptible --it gets the idea that it can unleash "yellow rain" and can shoot the pope with little to fear from the West's fitful disapproval.

Besides, if this case is not America's business, what is? On Oct. 5, 1981, Wallenberg became only the second person (Winston Churchill was the first) to be made an honorary American citizen.

Signing the bill conferring this honor, President Reagan said "we're going to do everything in our power" to locate Wallenberg. But we have not done that. So before Reagan agrees to meet with Yuri Andropov, he should receive an answer, beyond the routine mendacities, to this question: Where is Raoul Wallenberg?