Panama Officials Demand Investigation : Diplomacy: National embarrassment sets in after tear gas and gunshots prevented Bush’s speech.

Government officials on Friday demanded to know why tear gas was fired, and in such large quantities, to disperse anti-American demonstrators who disrupted a planned speech by President Bush on Thursday.

Vice President Guillermo (Billy) Ford was among the Panamanian officials asking for an investigation. He told a news conference he was not yet blaming police, “but this deserves a major investigation.”

The spectacle of Bush and his wife, Barbara, being hustled away as gunshots and tear gas were fired during their brief visit has created a major embarrassment for Panama’s government.

The President and Mrs. Bush appeared shaken and pale but were otherwise unharmed in the incident at Plaza Porras in downtown Panama City.

Local headlines read, “Shame in Panama” and “Absurd Spectacle.”

Meanwhile, a draft of a yearlong U.S. government study showed that Washington’s $420-million aid package to Panama, meant to jump-start the economy and create goodwill after the U.S. invasion in December, 1989, has had “no significant impact on the economy” or the underlying causes of political instability there, the Washington Post said in today’s editions.

The report by the General Accounting Office, the investigative arm of Congress, concludes that too much money has been spent on bolstering the banking sector after U.S. officials “overstated” the threat of a post-invasion run on the banks that never occurred, the Post reported in today’s editions. It also finds that 70% of the money earmarked to aid the poor and promote democratic institutions has not yet been disbursed.

In Rio de Janeiro on Friday, Bush showed no ill effects from the scare that overshadowed what the White House had planned as a triumphal visit to the site of his Administration’s first military victory.

And as the President attended to Earth Summit business in Rio, the White House did its best to improve public perceptions of the Panama stopover. A spokesman reported that after being separated from President Guillermo Endara in Thursday’s chaotic episode, Bush telephoned the Panamanian leader from Air Force One to ease his concerns.

Bush told Endara that “the demonstrations were unimportant and (Endara) shouldn’t worry about them,” chief White House spokesman Marlin Fitzwater said. “He said he felt that it was an excellent visit.”

Bush was reported to have extended the same air-to-ground assurances to Panama City Mayor Mayin Correa, who gamely continued her remarks introducing the President even as clouds of tear gas began to cause panic among the flag-waving throng in the plaza.

The Panama government’s embarrassment was evident Friday as Ford asked how hundreds of demonstrators were allowed to get within 500 feet of the spot where Bush was to speak.

“We want to know why so much gas was used when, according to what we have been told, the demonstrators ran away when the first gas was fired,” he said.

Bush said before he left here Thursday that he appreciated this country and its citizens and that “no small leftist protest group will change our opinion.”

Juan Chevalier, the Cabinet minister in charge of police, hotly rejected local newspaper speculation that police officers intent on derailing Bush’s visit were responsible for Thursday’s incident.

Chevalier said the accusations were probably aimed at undermining police effectiveness.

Shortly before Bush was to speak, riot police fired tear-gas canisters at protesters. After the Bushes and President Endara were whisked away, police kept firing tear gas, including at least two canisters directly into the plaza. At least 10 tear-gas canisters were fired, onlookers said.