REPORTER’S NOTEBOOK : Bushnell--U.S. Secret Weapon : Government: The most powerful man is not the president or even a Panamanian.

The man who runs Panama has an office in the Presidential Palace and roars through town in a bulletproof limousine accompanied by armored cars full of large, heavily armed bodyguards who wear ominous dark glasses.

He decides who can walk free and who goes to jail, when citizens can be on the street and when they have to be in their houses, and even what avenues are open to traffic.

This man is not President Guillermo Endara, nor is he the popular, charismatic 2nd Vice President Guillermo (Billy) Ford, nor the intellectual 1st Vice President Ricardo Arias Calderon. He isn’t even a Panamanian.

And if you thought, well, it must be the American ambassador, you would be wrong. The man who runs Panama is a middle-aged career diplomat who has never reached the rank of ambassador--in fact, he’s never held a post higher than that of the No. 2 diplomat in the American Embassy in Argentina.

He is a tall, stooped American with thinning hair and a desire not to be identified in public. His name is John Bushnell--and he is the closest thing the United States has to a proconsul.

While Endara, a once-obscure lawyer with no political following, is enjoying the public trappings of office--a Mercedes-Benz limousine, a tricolored presidential sash and bowing and scraping aides, Bushnell wears a simple, white sport shirt and nondescript slacks.

The only things that set him apart from the crowd are his security guards and a white bulletproof vest that he wears outside his shirt.

But, when the new Panamanian government was temporarily located in the Foreign Ministry, the two vice presidents had their offices in cramped quarters on the first floor--while Bushnell was ensconced next to Endara in comfortable rooms on the second floor. He even lives in the same building where Endara, Ford and Arias live near the American Embassy.

If Bushnell appears unassuming and his title is nothing more than U.S. deputy chief of mission, the people in the know here know who to talk to when things need to be done.

When U.S. troops stepped over the bounds of international law and violated the diplomatic sanctity of the Nicaraguan ambassador by raiding his official residence, it was Bushnell who was called and who fixed things.

And when American troops were trying to unnerve ousted dictator Manuel A. Noriega by playing loud rock music outside his hiding place in the Vatican embassy, it was Bushnell who ordered the broadcasts toned down after the Vatican’s emissary complained that he couldn’t sleep.

Bushnell is reported to have approved sending American troops to seal the area around the Peruvian Embassy because of reports that Noriega might seek asylum there, and he was the one the Peruvian ambassador complained to.

“No diplomat calls (U.S.) Ambassador (Arthur) Davis; he doesn’t count,” said a European envoy about Davis--the almost invisible political appointee who is mocked by some associates as Elmer Fudd because he has a slight speech impediment.

Sources said that Bushnell has signed off on curfew hours set for this capital city and makes the final decisions on which former Noriega officials and cronies are arrested. And, says a senior embassy official who asked not to be identified, until the Panamanian government is capable of assuming police and security functions, “the embassy is in operational control” of Panama.

That means, says a different official, John Bushnell.

Bushnell’s role is not the only unusual aspect of life in Panama in the wake of the Dec. 20 American invasion.

Part of that invasion has been a massive influx of reporters and broadcast technicians. At one point, the figure reached nearly 500, many of whom had never covered a military operation nor been near danger.

The number of journalists quickly overwhelmed the American military’s capacity to deal with them. To pare down the total to something manageable, the U.S. Southern Command took an imaginative approach that showed more originality than some of its battle tactics.

First, the military made life very uncomfortable--preventing reporters from leaving U.S. bases but not providing places to sleep, adequate facilities for filing their dispatches or sufficient food.

Then, the soldiers turned to scare tactics. After describing how his car had been shot at near the American Embassy and saying that “it is war out there,” Col. Ronald Sconyers, the Southern Command’s spokesman, said a charter flight had been arranged to take anyone to Miami who wanted to go.

Nearly 125 of the 300 journalists in the room immediately signed on for the trip, even though none had been outside of the American-run Howard Air Base here or had been in Panama for more than 12 hours.

Even though Noriega has been thoroughly discredited--and even the former dictator’s most loyal supporters now sport Endara T-shirts--some signs of the former regime remain.

Standing 20 feet tall on Via Espana, one of Panama City’s busiest streets, is a huge poster, unblemished by graffiti, pronouncing “Carlos Duque, President.”

Duque was Noriega’s handpicked presidential candidate who was embarrassingly trounced in last May’s vote. Noriega ultimately annulled the results. Duque is being sought by the U.S. military.