Cold War Blinders

How the CIA’s ‘Cold War Tunnel Vision’ clouded American Judgment on Guatemala in 1954

Sjoerd de Vries Lentsch History Master Thesis - American Studies Supervisor: prof. dr. R.V.A. Janssens Second reader: dr. H.B. Beukenhorst Final version: October 2014

Table of contents

Introduction 5

Chapter 1: The Case of Guatemala 16

Chapter 2: The Actors: The United States of America 27

Chapter 3: The Central Intelligence Agency’s ‘Modus Operandi’ and Operation PBSUCCESS 40

Conclusion 56

Bibliography 63

Introduction

Operation PBSUCCESS. The name demonstrates the great confidence and even arrogance the Central Intelligence Agency displayed in the planning and execution of its 1954 covert operation to overthrow the government of Guatemalan president Jacobo Árbenz Guzmán. The operation was considered a resounding success, as a troublesome president suspected of communism (and therefore seen as inherently under the control of the Soviet Union) was removed from power and a cooperative dictator replaced him. All this was achieved without any direct evidence that the CIA or the United States were involved, though American involvement was widely suspected. Despite this suspicion, the agency was so pleased with operation PBSUCCESS that it would be used as a blueprint for future operations, the most notorious one being the Bay of Pigs invasion in Cuba which ended in a complete failure for the United States, both militarily and politically. As successful as operation PBSUCCESS was considered from an operational point of view, it would become one of the most controversial CIA operations to date and did considerable damage to the reputation of the CIA and the United States, in particular in Latin America.1 Operation PBSUCCESS, or at least the situation it created, is also seen as one of the main causes of the Guatemalan civil war (that lasted 36 years and cost the lives of tens of thousands of Guatemalans). The controversy surrounding this operation does not only derive from the CIA’s ousting of a democratically elected president because the United States, the ‘protector of Democracy,’ disagreed with this president’s policies. One of the main points of criticism is that Jacobo Árbenz did not intend, as the United States believed, to turn Guatemala into a communist state. Also, historians question the American conviction that Árbenz (and his policies and reforms) were communist to begin with, and if he should have been considered a ‘communist’ in the Eastern European/Soviet tradition. Moreover, as the CIA archives were gradually declassified it turned out that the American claim that Árbenz was controlled and financed by Moscow was not based on any hard evidence. This claim had already met with skepticism in the international community in the years leading up to and following the coup, despite vigorous American efforts to convince the world otherwise.2 In the existing literature on operation PBSUCCESS the role the CIA has played in the operation is predominantly described as merely an executive one: The United States

1 Max Holland, ‘Operation PBHISTORY: The Aftermath of SUCCESS’, International Journal of Intelligence and CounterIntelligence 17 (2004) 300-332, 323. 2 Holland, 300-332, 310-312.

5 government came to the decision that an intervention was necessary and the CIA was the instrument used to make this happen. This is however a gross undervaluation of the role the Agency played. The CIA operated as an independent body with its own worldview, analytical tradition and with its own set of goals, and its analysis of the situation in Guatemala was wrong precisely because of this. This view of the CIA and its role is something that has only gradually become apparent due to the declassification of CIA archives, and is beginning to be recognized in more recent studies on the subject. The independent role the CIA played will be the focal point of this thesis.

The intervention What eventually drove the United States to feel compelled to intervene in Guatemala was a revolutionary land reform program that was planned and enacted by Árbenz. This land reform was the culmination of a radical transformation Guatemala was going through that had started in 1944 with a revolution. In the early 1940s, 2% of all landowners owned 72% of all Guatemalan land. The American United Fruit Company was by far the most powerful economic player in the country; it was the largest landowner in Guatemala and owned the railroads (through its subsidiary the International Railways of Central America), the country’s power supply, and the only major harbor.3 In 1944, the rising tensions after decades of dictatorial rule, combined with economic hardship and calls for democratization, culminated in a revolution led by university teachers. The main inspiration for these teachers was Franklin D. Roosevelt’s famous 1941 State of the Union address, or his ‘Four Freedoms speech,’ in which he stated four fundamental freedoms people everywhere should enjoy. This revolution forced dictator Jorge Ubico to step down, and in the following year democratic elections were held for the first time in Guatemalan history. The goals of the revolution were not only aimed at the deposing of a dictator followed by the democratization of Guatemala, but also at reforming the social structures, which was widely considered (even by American economists) to be impossible without rigorous agrarian and economic reform, as land and social status were intimately entwined. It was self-evident that any attempt at large-scale land reform would be met with fierce resistance from the ruling classes and foreign companies with large interests in Guatemala, the United Fruit Company in particular.45 These land reforms were advocated and enacted by Jacobo Árbenz, elected in

3 Stephen Schlesinger and Stephen Kinzer, Bitter Fruit. The Untold Story of the American Coup in Guatemala (Garden City, New York: Doubleday & Company, 1982) 38, 65-67. 4 Ibid, 52-55.

6 1951 and would eventually lead American president Eisenhower to intervene and approve the planning and execution of operation PBSUCCESS. (The decision to intervene in Guatemala was essentially already made during the presidency of Harry S. Truman, who approved a similar operation prior to PBSUCCESS, named PBFORTUNE. This operation was cancelled however, as it was compromised at an early stage.6) The suspected communist nature of the Árbenz government (and the – according to the United States – therefore inherent ties to Moscow) and the danger the land reforms posed to American economic interests in Guatemala are considered to have led to this controversial decision. The United States government was determined to prevent the creation of a ‘communist beachhead’ in its own backyard. Many books and articles have been written on the 1954 coup, and a few studies are considered to be ‘standard works’ on the subject. Among these standard works are Bitter Fruit by Stephen Schlesinger and Stephen Kinzer, The CIA in Guatemala by Richard Immerman, Shattered Hope by Piero Gleijeses, and Secret History by Nicholas Cullather. In these works the main interpretations of the coup are represented. An important note on Secret History by Nicholas Cullather is that it has been written in 1993 as part of an internal CIA project after a series of declassification of CIA archives concerning the coup, and was initially not intended for publication. In all the aforementioned works the coup itself is essentially considered to have been a mistake caused by gross misinterpretation of the situation in Guatemala by the United States government and the CIA. However, the views differ on how the American government came to the decision to intervene and which players or ‘factions’ influenced the decision and to what extent this influence was decisive or superfluous. Only Cullather acknowledges the aforementioned undervaluation of the role the CIA played, but he does not expand on this as his work had a different focal point.

Bitter Fruit In the 1982 book Bitter Fruit. The Untold Story of the American Coup in Guatemala journalists Stephen Schlesinger and Stephen Kinzer argue that the most important factor in the decision to intervene was the threat president Arbenz and his communist policies posed to American economic interest in Guatemala. The ‘containment of Communism’ played an important role in the validation of the coup as well, but it was only the result of the economic

5 Nick Cullather, Secret History. The CIA’s classified account of its operations in Guatemala, 1952-1954 (Stanford: Stanford University Press, 2006) 25-26. 6 Ibid, 29-31.

7 angle; without a threat to the economic interests Communism would not have been detected. The United Fruit Company was one of the first (and largest) landowners and employers in Guatemala to be affected by the reforms. The company already had many conflicts with the Guatemalan government caused by the modest reforms of Juan José Arévalo (the first Guatemalan president after the 1944 Revolution). These conflicts would later escalate during the extensive land reforms of the Árbenz administration.7 From early on United Fruit would start lobbying against the Guatemalan government. This lobbying (by influential and respected figures) was not only aimed at the United States government, but also at the American public. The United Fruit Company proved to be very successful at convincing the American public and government that Guatemala posed a communist threat.8 According to Schlesinger and Kinzer this is essentially where ‘the road to intervention’ originates. The relationship between the American and Guatemalan governments escalated, as the economic dispute between United Fruit and Guatemala intensified. By the time relations were at a low, the idea of a communist state so close to the United States was simply unacceptable for the American government during the Cold War, especially during the early 1950s. This scenario would eventually and inevitably lead to a United States sponsored coup (or ‘regime change’). Schlesinger and Kinzer state that without the lobbying by the United Fruit Company (or without United Fruit in general), there would have been no serious conflict between the United States and Guatemalan governments, let alone a CIA sponsored coup. Therefore Schlesinger and Kinzer state that the protection of economic interests stood at the basis of the coup, as without any economic interests – or essentially the United Fruit Company to protect – the United States government would have had little interest in the political developments in Guatemala.9

The CIA in Guatemala In The CIA in Guatemala. The Foreign Policy of Intervention, also from 1982, historian Richard Immerman has a similar view concerning the United States economic interests, but attributes more importance to the American goal of ‘containment of Communism.’ Immerman identifies virtually the same development as Schlesinger and Kinzer, but comes to a different conclusion concerning the decisive element in regard to the motivation and validation of the coup. He acknowledges that the United Fruit Company and its subsidiaries

7 Schlesinger and Kinzer, 70-77. 8 Ibid, 94-97. 9 Ibid, 77.

8 had influence on the United States government’s perception of the Árbenz administration through lobbyists, among who were several key figures in the CIA and American government. However, he states that the American fear of Communism (nonetheless influenced by the United Fruit Company) was the main driving force behind the coup, not American economic interests.10 Immerman places the coup in a Cold War context. He considers the economic factor to be of minimal importance as a decisive element in the motivation of the United States government. He does however recognize that the hostile attitude of the American government was developing parallel to the labor disputes between the Guatemalan government and the United Fruit Company, and that this attitude got progressively worse as the disputes became more intense. Immerman sees the political and economic position of the United States in Guatemala (and in fact the whole region) as inseparable. This is in part demonstrated by the obvious connection between government officials and the United Fruit Company and its subsidiaries. These connections were however not only of an economic nature according to Immerman, but should be seen in the ideological context of the Cold War.11 The United States government interpreted the increasingly radical reforms of the Árbenz regime as clear signs of Communism in Guatemala and therefore as a threat and challenge to American power, both political and economic, in the region. Immerman, like Schlesinger and Kinzer, sees the American interpretation of the Guatemalan situation as a gross misperception.

Shattered Hope Historian Piero Gleijeses wrote his book Shattered Hope. The Guatemalan Revolution and the United States, 1944-1954 in 1991, nine years after both Schlesinger’s and Immerman’s books, and he starts out with identifying the existing different views on the motives for the 1954 coup d’état – protecting economic interests versus fighting communism. Gleijeses further indicates that he intends to incorporate the Guatemalan side of the story (by interviewing many key figures from both Guatemala and the United States), as this side has been neglected in studies on the subject. He states that when looking at the archives (those available in 1991, before the period of extensive declassification mentioned earlier), the United Fruit Company had an enormous influence on, or even shaped, the American perception of the Arévalo administration. However, when Árbenz is elected president, Gleijeses notes that United Fruit

10 Richard Immerman, The CIA in Guatemala. The Foreign Policy of Intervention (Austin: University of Texas Press, 1982) 73, 88. 11 Ibid, 115-118.

9 quickly becomes a less important influence on the American government as they are by then already convinced Árbenz is too great a threat to stability in the region; in the assessment of Arbenz the United Fruit Company has clearly moved to the background, as United Fruit’s interests were only a secondary concern to the American government.12 Gleijeses argues that this concern should be seen within the United States government’s views on Central America being part of its sphere of influence. The plight of the United Fruit Company did however serve as evidence to the American government that Communism was taking hold in Guatemala, as they viewed the reforms Árbenz was enacting as unmistakably communist and profoundly shocked United States officials.13 Gleijeses further argues that Árbenz was in fact a communist, or at least something very similar to a communist, and above all an idealist. Gleijeses interviewed many people connected to the coup, most notably Árbenz’s (by then ex-) wife and one of his closest friends of the period, communist leader Manuel Fortuny. In these interviews, Árbenz’s political conviction is depicted as moving closer and closer to Communism, especially during the months leading up to the coup.14 In the late forties and early fifties it did not take much for the United States to perceive a man like Árbenz as a communist, especially when, according to Gleijeses, he actually was one or at least something very close to it. He was also openly working very closely with known communists. The spirit of McCarthyism was widespread throughout American society, the Korean War had just ended and China was suddenly (at least in the eyes of the United States and the CIA) ‘lost’ to Communism. Gleijeses argues that the United Fruit Company was absolutely not necessary to point out (suspected) communist influence in Guatemala.15 In conclusion, Gleijeses states that Árbenz was an idealistic nationalist, a communist (or at least very sympathetic to Communism), and naïve in his assessment of American determination and willingness to intervene. In turn, the United States government misinterpreted the intentions of the Árbenz administration because of their initial ignorance on the Guatemalan situation. The way in which the United States typically approached governments in Central America is described by Gleijeses as an attitude of ‘imperial hubris’, which also added to the strenuous relationship between the successive American and Guatemalan governments.16

12 Piero Gleijeses, Shattered Hope. The Guatemalan Revolution and the United States, 1944-1954 (Princeton: Princeton University Press, 1992) 361-363. 13 Ibid, 364-366. 14 Ibid, 141-148. 15 Ibid, 362. 16 Ibid, 361-363.

10

Secret History Historian Nick Cullather’s book Secret History. The CIA’s classified account of its operations in Guatemala, 1952-1954, especially the second edition from 2006, is perhaps the most interesting study on the subject to date. His book was written as an internal study for the CIA itself during a period of more openness followed by the fall of the Soviet Union. Cullather explains this sudden openness by saying: “As the new Russian government was opening all the archives, the CIA could not stay behind.”17 Cullather and several other historians were hired by the CIA in order to write internal histories (i.e., meant for internal use only) of major Agency operations, as this sort of internal histories and evaluations did not exist. Cullather would write about operation PBSUCCESS. Cullather describes the goal of his work as follows:

The book’s core audience would be CIA officers and trainees who would want to know how an operation worked from start to finish: How the agency assessed a threat and devised a plan to combat it, what kind of government and society it aimed to create, how the operation played out, and how (or whether) the outcome was measured against the original plans and goals.18

After the initial initiative for openness began to lose momentum, Cullather quit his position with the CIA after completing his study on PBSUCCESS in 1993. Eventually his book was published in 1999 after a new popular call for more openness on past CIA operations. The second edition (printed in 2006) includes more files from a new volume of the FRUS (Foreign Relations of the United States) series, including newly declassified materials that were still classified at the time of the initial public publication of Cullather’s book. With access to all of these (declassified) documents, Cullather was able to paint a far more detailed picture of the coup d’état, as these documents show the inner workings of the United States government and the CIA. From these files the actual view of the CIA itself on the Guatemalan situation can be distilled.19 Cullather identifies the CIA as an independent body among all the parties involved, rather than an instrument used to execute United States policy without forming an independent opinion on Guatemalan affairs, as the other authors seem to do. He illustrates this by stating that the CIA “often had little understanding of or interest in the motives of those in

17 Cullather, xi-xii. 18 Ibid, xv. 19 Ibid, 7-8.

11 the Department of State, the Pentagon, and the White House who made the final decision.”20 Cullather states that the Agency operated solely based on its own ‘Cold War motivated worldview,’ rather than looking at the situation in Guatemala, the region and its history. By completely neglecting the uniqueness of the Guatemalan situation in the 1940s and early 1950s, and failing to view the progress and outcome of operation PBSUCCESS as a unique and individual event, the CIA not only misinterpreted the Guatemalan government and its intentions, but also wrongfully considered the operation to be the perfect blueprint for ‘regime change’ in the future.21 Essentially Cullather’s book is an analysis of a controversial CIA operation, written as a warning against misinterpreting similar events and with it a critique on the Agency’s method of interpreting world events (all intended for internal use by the CIA). What’s interesting when looking at all these works on operation PBSUCCESS, is that all the authors seem to downplay or ignore the role the CIA played as an independent body, as Cullather points out in ‘Secret History.’ They all pay a lot of attention to the role the CIA played in the coup itself and in the necessary technical and logistical matters, but they always consider the Agency as primarily an instrument and executor of government policy and decisions, rather than an organization with an agenda of its own and considerable influence on the government perception, and showing great initiative on its own accord. The United Fruit Company appears to have been given too much credit in shaping the evolution of the American-Guatemalan relationship in the years leading up to the coup. Cullather is the only one who points out this ‘shortcoming’ of earlier works, but he does not really make an in depth analysis of the CIA and its traditions and motives that have been of great importance to the Agency’s view on Central America. Instead, he focuses more on operation PBSUCCESS itself and the operational details, as this was the intention of his study. In this thesis I intend to focus on the independent role of the CIA Nick Cullather has identified in his book ‘Secret History.’ As Cullather concluded, the CIA failed to see the events in Guatemala in the appropriate context; rather than looking at Guatemala from a Central American context the CIA did not differentiate between Communism (suspected or real) in Latin America, Eastern Europe or Asia and placed it in a Cold War context. Because of this the CIA did not pay sufficient attention to the ‘situation on the ground’ in its analysis of the Guatemalan situation. I will look at the events in Guatemala using the models that are identified and used in Essence of Decision. Explaining the Cuban Missile Crisis by political scientists Graham Allison and Philip Zelikow. In Essence of Decision, Allison and Zelikow

20 Ibid, 8. 21 Ibid, 109-110.

12 describe three models that can be used to look at a (historical) event. They start with stating that generally speaking the questions that are asked when looking at a historical event are essentially ‘what happened and why did it happen’ questions. Allison and Zelikow state that three conceptual models can be used when looking at an (historical) event. “Most analysts explain (and predict) behavior of national governments in terms of one basic conceptual model, here entitled Rational Actor Model (RAM or Model I).”22 In short, using this model means that the decisions of a government are seen as “the more or less purposive acts of unified national governments… Theorists of international relations focus on problems between nations in accounting for the choices of unitary rational actors. Strategic analysts concentrate on the logic of action without reference to any particular actor.”23 So Model I is fairly straightforward, as the main question that is asked in this model is the ‘why question.’ Why did – using the events in Guatemala as an example – the American government decide an intervention was necessary in Guatemala? Why did Árbenz enact such drastic reforms defying the United Fruit Company and with it American economic interests? The researcher “focuses attention on certain concepts: goals and objectives of the nation or government.”24 Allison and Zelikow point out that while this model answers relevant questions, its scope is limited. They argue that this model needs to be supplemented in order to paint a more complete picture of the events. One of the other two models they introduce is the so-called Organizational Behavior Model (or Model II). “According to this Organizational Behavior Model, what Model I analysts characterize as ‘acts’ and ‘choices’ are thought of instead as outputs of large organizations functioning according to regular patterns of behavior.”25 “The analyst invokes certain patterns of inference: if organizations produced an output of a certain kind at a certain time that behavior resulted from existing organizational structures, procedures, and repertoires.”26 In other words, the focus in Model II lies with the different (governmental) organizations that are active and in which context, and from what beliefs, convictions, procedures etc. these organizations act. In the case of Guatemala it is the CIA that is neglected as an independent organization with its own procedures and worldview, as Cullather has pointed out. The third model Allison and Zelikow identify is the ‘Governmental Politics Model’ (or Model III). “According to this model, events in foreign affairs are characterized neither as

22 Graham Allison and Philip Zelikow, Essence of Decision. Explaining the Cuban Missile Crisis (Chicago: Longman, 1999 2nd edition) 4. 23 Ibid. 24 Ibid, 4-5. 25 Ibid, 5. 26 Ibid, 6.

13 unitary choice nor as organizational outputs. Rather, what happens is understood as a resultant of bargaining games among players in the national government.”27 So in the case of Guatemala, the focus would be the ‘intra-governmental’ bargaining in the United States government, mainly between the American president, the State Department and the CIA. In this thesis I intend to demonstrate that the CIA’s ‘Cold War inspired worldview’ and its Cold War ethos dominated the agency’s assessment of the situation in Guatemala to such an extent that there was only one outcome possible: a coup d’état. The CIA had put on a set of ‘Cold War blinders’ that limited the agency’s view throughout the entire Cold War. This concept of ‘Cold War blinders’ should be seen in conjunction with the concept of ‘groupthink,’ described by psychologist Irving L. Janis. In his book Groupthink, Janis describes the effects the composition of groups have on their decision making process. When, as is the case with the CIA, the group in which decisions are being made consists of a small amount of likeminded people, it is likely that this ‘cohesiveness’ of the group will have a strong limiting influence on the outcome of the decisions. Jarvis calls this phenomenon ‘groupthink,’ which he describes by analyzing United States foreign policy. He states that groupthink leads to “overestimations of the group” (its power and morality), “closed- mindedness” and “pressures toward uniformity.”28 These principles of groupthink would be of an even greater influence on the CIA, due to its closed nature and strong ‘esprit de corps.’ In order to demonstrate the existence of these ‘Cold War blinders,’ the abovementioned Model II (or the Organizational Behavior Model) will be the main model implemented when looking at the role the CIA played as an individual player within the American organizations and government agencies that played a role in the Guatemalan coup d’état. Model III (or the Governmental Politics Model) will automatically be used when the CIA’s influence on and interaction with the State Department and the American president and the ‘bargaining’ between these government bodies are studied, but the main focus will be on the CIA’s independent internal workings. In order to prove the abovementioned thesis, I will first analyze the events in Guatemala leading up to the intervention in 1954. After this I will identify the different American and Guatemalan actors that were active and played important roles in the coup d’état. With these three chapters the Guatemalan coup d’état will be contextualized and illustrated, for which the abovementioned studies on the 1954 Guatemalan coup will be used.

27 Ibid. 28 Irving L. Janis, Groupthink. Psychological Studies of Policy Decisions and Fiascoes. Second Edition (Boston: Wadsworth, 1982) 2-3, 175-175.

14 In the final chapter the focus will shift to the inner workings of the CIA itself and how the agency responded to the events in Guatemala. The position the CIA was in at the time, the Agency’s worldview, the prevailing ‘Cold War discourse’ and the ‘corporate culture’ within the Agency will be analyzed, as well as its relationship with the State Department, the United States president and other actors like the United Fruit Company. From this analysis it will become clear that the CIA’s ‘Cold War worldview’ created a tunnel vision that essentially pre-determined the outcome of their assessment of the situation in Guatemala. In this final chapter Model III will be used as well as Model II in order to demonstrate the interaction between the different governmental organizations. The primary sources used for this will be the declassified CIA archives29 and the previously mentioned FRUS series, both the original series as well as the additional Guatemalan series that were released after declassification and National Security Council reports.

29 All references to declassified CIA documents in footnotes will refer to the title of the document and a page number. The CIA website offers a database that is difficult to navigate to say the least. In the bibliography section all titles are listed chronologically and with direct links to the PDF files. All references made to page numbers are the page numbers of the PDF files themselves, not of the CIA documents, due to the fact that in some documents page numbering is inconsistent.

15 Chapter 1 – The case of Guatemala

In this first chapter I will take a look at the situation in Guatemala leading up to the 1944 Revolution, the (political) changes that resulted from it and the way the United Fruit Company and the United States Government responded to this new political situation.

Guatemala in the first half of the 20th century: Banana Republic Guatemala in the 19th and early 20th century was a quintessential banana republic: the country’s economy was based on the export of just two products, bananas and coffee, and was in the hands of foreign companies and a small local elite. A dictator friendly to these companies and the local elite ruled the country. The Guatemalan economy was therefore best described as semi-feudal. The social-political system was also aimed at providing both the local elite and the foreign companies with cheap labor and low taxes. This was combined with structurally granting extremely favorable conditions on land acquisitions, especially by the country’s last two dictators before World War II. This system provided the small Guatemalan elite and especially the foreign companies with a monopoly at an incredibly low cost. The largest company – which had by far the most land, workers and investments in Guatemala – was the Boston based United Fruit Company. United Fruit was the largest landowner and employer of Guatemala and had many interests and investments throughout Central America. It played a major role in the region’s economy and politics, as the company was not known to shy away from interfering in the affairs of Central American governments in order to advance or protect its interests. Because of this vast (economic) empire it was called ‘el pulpo,’ or ‘the octopus,’ throughout Latin America, as it had its ‘tentacles’ in many Latin American countries.30 Guatemalan society in the 19th and early 20th century was essentially made up of two groups. The vast majority consisted of the descendants of the Mayans (or ‘Indians’31 as they were called), who – like their ancestors before them – had virtually no rights. The elite of Guatemala was very small, consisting of the descendants of the Spanish colonizers (and by the 20th century also Americans and their descendants). The term used to indicate these ‘European’ Guatemalans was ‘Ladino.’ At the start of World War II the elite still consisted of mainly foreign-born landowners and social mobility was virtually non-existent. However, the

30 Immerman, 20-22, 27-29. 31 In this thesis the Guatemalan descendants of the Mayans will be referred to as ‘native Guatemalans’ rather than ‘Indians.’

16 first half of the 20th century saw the ‘birth’ of a middle class. The rise of this ‘new’ social group also began to influence Guatemalan politics. By the 1940s, this new middle class constituted only about 30% of the total population (the native Guatemalan population being estimated around 70%, with the elite estimated at only 1% or 2%).32

Economic hardship and social unrest: the 1944 Revolution As mentioned earlier, Guatemalan society, politics and economy were all closely connected to each other. The economy was by far the most important factor or pillar, as the political and social structures were built around the economy and were designed to maintain the ‘system’ and is therefore to be considered the crux of any attempt at reform. One of the most important aspects, if not the most important, of the Guatemalan economy of the early 20th century that caused this semi-feudal system was the enormous disparity in landownership. The largest percentage of the land was incorporated into large plots, called ‘latifundios’ (small plots were called ‘minifundios’). These latifundios were for the most part owned by foreign companies. The disparity is best demonstrated in numbers given by Richard Immerman:

Prior to Árbenz’s land reform in 1952, only 2,2 percent of Guatemala’s population held over 70 percent of the land, and less than one-sixth of 1 percent held almost 14 percent. Twenty-two percent of the population, most of whom were Ladinos, owned another 20 percent of the land, leaving less than 10 percent for the remaining population. About 90 percent of this remainder was Maya.33

In short, of all the arable land in Guatemala the vast majority of it was organized in ‘latifundios’, which included the best locations in both accessibility and fertility. Among these large landowners the Guatemalan elite was represented, but the largest operator by far was the United Fruit Company, that held around 550,000 acres of land.34 United Fruit did not only own land in Guatemala; the American company also controlled the country’s infrastructure. The railroads, Guatemala’s only major port Puerto Barrios, the electrical and phone companies were all owned by the United Fruit Company itself or by a subsidiary. This meant that United Fruit effectively controlled Guatemala’s economy. This foreign control meant that all the profits that were made naturally flowed out of Guatemala to the United States, as the Guatemalan landowners also tended to invest their profits in America or Europe.

32 Ibid, 25-31. 33 Ibid, 28. 34 Ibid, 27-29, 80-81.

17 The focus on only two products that were destined for the export market (coffee and bananas, coffee being the most important one for Guatemala itself as it was in the hands of Guatemalan nationals and not foreign companies) made the Guatemalan economy incredibly vulnerable, as it was completely dependent on the international price of coffee and bananas. During the economic crisis of the 1930s the Guatemalan economy was among the hardest hit in the whole of Latin America. The coffee market again came under intense pressure as World War II broke out, effectively closing the European market. The United States remained as the only large market for coffee and “could not absorb the entire surplus, since the other Latin American coffee-producing nations, experiencing the same difficulty, also turned to the United States.”35 Guatemala was consistently, as Immerman puts it, “on the brink of total collapse”36 since the Crash of 1929.37 This lengthy and continuous economic hardship would be an important factor in the 1944 Revolution. The economic hardship of the 1930s and 1940s combined with the political changes that came with the Second World War created pressure on the privileged position of the foreign companies and the Guatemalan elite. The growing and upcoming Guatemalan middle class began to stir and demanded change, which came with the 1944 Revolution that overthrew dictator Jorge Ubico. The revolutionary period in Guatemala that followed was aimed at nothing less than radically reforming the political, social and economic ‘structures’ of the country.

The revolutionary movement The 1944 Revolution was marked by a unified resistance to the 13-year rule of general Jorge Ubico. The term ‘unified’ must be placed in its proper context though, as it is to be considered unified in Guatemalan society of the period. The fact that the growing Guatemalan middle class rose up as a virtually unified movement was a novelty in itself. Even more remarkable was that not only the non-elite Guatemalans voiced their discontent. The elite, or at least a considerable part of it, eventually also turned its back on Ubico, the man they had put into office themselves in 1931. The main absentees in the ‘revolutionary movement’ were the native Guatemalans, making up the vast majority of the countries’ population. This group did not participate in the demonstrations started by Guatemala’s middle class, although the

35 Immerman, 31. 36 Ibid, 32. 37 Ibid, 30-31.

18 demands made by the demonstrators were – be it indirectly – also on their behalf.38 However, the fact that representatives of all the politically influential groups started to resist Ubico’s rule was what put a pressure on the dictator that had never before been this strong. Consequently, Ubico caved in remarkably quickly and stepped down after only a few weeks of protests. The Second World War did not only bring economic hardship to Guatemala. It also brought international ideals on basic human rights and freedoms. The main inspiration for the 1944 Revolution is believed to have been the famous ‘Four Freedoms Speech’ by president Roosevelt – his 1941 State of the Union speech – in which he spoke of four basic human rights or freedoms. Roosevelt advocated that everywhere in the world people were entitled to freedom of speech, freedom of worship (or religion), freedom from want and freedom from fear.39 Roosevelt enjoyed enormous popularity in Guatemala in the 1940s and his speeches on human rights and his labor reforms – such as the New Deal and the Wagner Act – awakened the Guatemalan middle class politically. Also the signing of the ‘Atlantic Charter’ (drafted by Roosevelt and Churchill) by all Allies in early 1942, where the principles of the ‘Four Freedoms’ speech were made into the official Allied goals of the war, inspired the Guatemalan middle class. 40

The presidency of Juan Jose Arévalo An important aspect of the revolutionary movement is that it was initially without any central leadership. The 1944 Revolution is considered to be a true spontaneous popular uprising. There were no real ideological origin or motives, nor was there an organized movement that led the protests. The Guatemalan teachers are generally considered to have been the driving force of the revolution and it would be a teacher, Juan Jose Arévalo, who would be elected president in the first truly free and democratic elections ever to have taken place in Guatemala.41 Arévalo presented himself as a liberal and a socialist, although he did not adhere to any ‘radical ideology’ and was anti-communist: “Communism is contrary to human nature, for it is contrary to the psychology of man… Here we see the superiority of the doctrine of democracy, which does not seek to destroy anything that man has accomplished.”42 His political ideas and beliefs are usually referred to as ‘Spiritual Socialism’ and were strongly

38 Immerman, 38. 39 Schlesinger and Kinzer, 26. 40 Ibid, 22-23. 41 Gleijeses, 30-36. 42 Schlesinger and Kinzer, 32.

19 identified with the policies of Franklin D. Roosevelt, most notably Roosevelt’s New Deal and Four Freedoms speech. As Arévalo himself put it: “he taught us that there is no need to cancel the concept of freedom in the democratic system in order to breathe into it a socialist spirit.”43 The reforms enacted by the Arévalo administration were aimed at changing the appalling labor conditions in Guatemala. Arévalo would use laws and acts of his political ‘idol’ Franklin D. Roosevelt as an example. The Social Security Law – approved by the Guatemalan Congress in 1946 – was based on Roosevelt’s New Deal and was designed to revolutionize the relationship between Guatemala’s workers, employers and government. Its main goal, like the New Deal, was to realize better conditions and security for the Guatemalan workers.44 In the wake of the Social Security Law came the Labor Code, approved in 1947. The Labor Code was inspired by another American reform, namely the Wagner Act, also enacted by Franklin D. Roosevelt. The Labor Code was the next step in revolutionizing the Guatemalan worker-employer relationship. One of the most important effects of the Code was that the formation of unions would be allowed and that the Guatemalan government would no longer automatically support the employers in labor disputes, as it has done until then.45 The reforms of Arévalo caused a serious conflict with the United Fruit Company and eventually also the United States State Department. United Fruit claimed and successfully convinced the State Department that the reforms were aimed especially against the American company and were therefore racist.46 A salient detail concerning the State Department’s labeling the Labor Code as discriminatory is a report of the legal advisor of the State Department. This advisor had spoken out in favor of the reforms in his report, stating he saw no discriminatory aspects in any of the Guatemalan reforms and even going as far as stating the reforms were quite similar to American – and other nations’ – laws. Arévalo’s reforms, and later Árbenz’s more radical reforms, were even considered by the World Bank as being vital if Guatemala was to evolve into a modern democratic state.47 This analysis from within the State Department itself was not heeded though and the Department continued its efforts to convince the Arévalo administration to undo its reforms and cease its ‘persecution of American businesses.’48 The dispute between the Arévalo administration and the United Fruit Company and the State Department was serious but did not escalate during the presidency of Arévalo. The

43 Ibid, 34-35. 44 Ibid, 38. 45 Ibid, 39. 46 Gleijeses, 94-96. 47 Ibid, 87-88. 48 Ibid, 96-98.

20 United States government hoped that the new Guatemalan president Jacobo Árbenz, who would take office in early 1951, would be less stubborn and would be open to American demands. It soon turned out that Árbenz was grossly misjudged.49

The presidency of Jacobo Árbenz Guzmán Jacobo Árbenz Guzmán assumed the Guatemalan presidency in March 1951. He quickly announced he would continue on the path of reform in the spirit of the 1944 Revolution, picking up where Arévalo had left off: agrarian reform. In his inaugural speech he presented his intention to move Guatemala away from its feudal system and turn the country into a ‘modern capitalist state.’ He made it clear that foreign businesses were welcome, as long as they obeyed Guatemalan laws and operated not only in their own interest but in that of Guatemala as well. The World Bank published an extensive report on the Guatemalan economic situation and it came to the same conclusions as Árbenz. The World Bank affirmed the targets and objectives of the new Árbenz administration concerning economic reform as being essential if Guatemala wished to modernize and develop its economy. As Schlesinger and Kinzer point out, the World Bank seemed to anticipate very accurately how foreign companies in Guatemala would respond to this attempt at agrarian reform: “the Bank warned foreign companies against ‘any direct or indirect political activity against the government’ and counseled them to ‘accept … the need to adapt their legal status and their operations to changed conditions.’ ”50 The Guatemalan elections and the planned policies of the Árbenz administration caused an even greater division and polarization in the country’s politics. The ‘old order’ and the country’s elite were determined and united in their opposition to the revolutionary government of Árbenz, and they had the United Fruit Company on their side. The revolutionary parties, the country’s army and the labor movements all supported the newly elected president. This caused a practical problem for Árbenz, as obtaining sufficient political support for his reforms was difficult in this polarized political climate. Árbenz did however continue his attempt at agrarian reform. Árbenz needed to break the monopolies of foreign businesses that controlled the Guatemalan economy in order to transform it. Nationalization would be a dangerous move and would certainly be criticized worldwide, certainly by the United States and would most likely be opposed in the Guatemalan Congress. However, in order to break the hold on

49 Ibid, 132-134. 50 Ibid, 52-53.

21 Guatemala’s arable farmland by large landowners, the land had to be redistributed.51 Árbenz’s agrarian reform came with the passing of the agrarian reform law in 1952, better known as ‘Decree 900.’ The decree targeted large plots of uncultivated land, of which the United Fruit Company owned many. The decree had several limitations that ensured only uncultivated land would be targeted: farms of 223 acres or less would not be subjected to the law, nor would farms of between 223 and 670 acres that cultivated at least two thirds of its land. The owners of the land that would be expropriated according to these targets would be compensated for their land. This compensation would be based on the lands declared taxable worth set in May 1952.52 The landowners affected by the decree, especially United Fruit, considered the compensation to be nowhere near the real value of the land, as large landowners had systematically undervalued their land in order to reduce taxes.53 The United Fruit Company responded to the decree in the exact same way as it did when the Labor Code was enacted by Arévalo: it claimed the company was the subject of discriminatory policies and the decree was specifically designed to target the American company. The fact that Guatemalan landowners and even large plots of state-owned lands were targeted and expropriated did not change this view of United Fruit.54 Árbenz’s attempt to enact Decree 900 automatically ‘pushed’ the Guatemalan president towards the Guatemalan communists, who supported the idea of land reform. During his presidency, Guatemalan communists were given several mid-level positions in his administrations, but no major posts were obtained by the communists. However, these posts were very visible to the outside world, and the United States was quick to notice this.55 It would be Decree 900 and Árbenz’s political collaboration with the Guatemalan communists that coincided with rising Cold War tensions that convinced the United States government that an intervention was necessary.

American interpretations of the situation in Guatemala The democratic aims of the 1944 Revolution may not seem to be very radical compared to democratic states in the region at the time (or even the United States itself), but it is important to bear in mind that a transition to a democratic and capitalist system would mean a break with a longstanding system and tradition with its strongly anchored privileged position for a

51 Schlesinger and Kinzer, 53. 52 Ibid, 54. 53 Ibid, 54-55. 54 Gleijeses, 150-151. 55 Schlesinger and Kinzer, 59-61.

22 small elite and foreign companies. It is therefore remarkable that this revolution did not, at first, arouse any concern in either the United States government or the United Fruit Company. The State Department welcomed the deposing of dictators in democratic revolutions and had no reason for concern, as the Arévalo administration cooperated with all regional American (strategic) programs.56 This initial calm reaction by both the United States government and the United Fruit Company can most likely be explained by the nature of the revolutionary movement. The fact that the uprising was an affair of the Guatemalan middle class, the elite and eventually the army was no immediate cause for alarm for United Fruit or the United States. As mentioned earlier, the main absentees during the revolution were the native Guatemalans. This was the group that was essential to the interests of the United Fruit Company, as a massive uprising of the native Guatemalans would mean the plantations would shut down. The fact that it was the middle class that was at the forefront of the of the Guatemalan Revolution reassured United Fruit and the United States government that the economic interests were not at stake. The United Fruit Company however was quick to express its worries concerning the new Guatemalan government after the first of the abovementioned reforms were enacted. The American company was quick to describe the Guatemalan reforms as being communist (despite the fact that these initial reforms were all based on American laws) rather than nationalist or democratic, and deliberately discriminatory of American businesses.57 The United States State Department initially did not share United Fruit’s view that the Guatemalan government was communist, but it did agree that the policies were discriminatory. This initial dispute between the American government and the Arévalo administration must therefore be seen as essentially an economic one. The appraisal of the Arévalo administration changed dramatically though as Cold War tensions started to rise in the wake of World War II. The new worldwide ‘communist threat’ abruptly placed the sudden Guatemalan ‘brash’ attitude in a completely different light. The Berlin Crisis, the Soviet nuclear bomb, the ‘fall of China to Communism’; all of these developments swiftly changed the American stance on anything slightly resembling leftist or communist tendencies. With these rising Cold War tensions the CIA’s analysis of the situation in Guatemala became increasingly hostile.

56 Cullather, 14-15. 57 Gleijeses, 94-96.

23 CIA Tunnel Vision in Guatemala The American political climate of the postwar years and the characteristics of the CIA (which will be treated extensively in chapter two) added to the agency’s Cold War tunnel vision. This tunnel vision can be easily identified when the CIA’s approach to Guatemala is studied. The CIA’s analysis of the situation in Guatemala during the late 1940s and early 1950s is the exact opposite of those made by the authors that have been mentioned in the introduction. Also contemporary assessments of Árbenz’s policies and motivations made by organizations like the World Bank were nothing like the CIA’s view on the Guatemalan president. The CIA made its assessments solely from a Cold War perspective, completely ignoring the Latin American context and dismissing all differing interpretations as wrong, communist-inspired or as based on communist deception. To the CIA the matter was simple: communists had taken hold of the Guatemalan government, and by definition all communists were under the control of Moscow. As John Peurifoy, ambassador to Guatemala during the coup, put it: “Communism is directed by the Kremlin all over the world, and anyone who thinks differently doesn’t know what he is talking about.”58 This statement sums up quite accurately how the CIA (and parts of the American government) viewed communist and leftist movements throughout the world, and how any differing opinions of these movements were dismissed. Even though the CIA viewed Árbenz as a threat from the very beginning of his presidency in 1951, the assessment of his predecessor Juan José Arévalo was not as extreme. In a 1949 CIA ‘outline briefing’ on the American – Soviet ‘conflict’ throughout the world, Guatemala is mentioned in a passage on the Latin American revolutions of the period. In this report it is concluded that “there is no evidence of any Communist backing – the changes in government were rather caused by more conservative elements … and are a result of economic conditions rather than political.”59 Here the assessment is placed in the appropriate Latin American context while at the same time including the Cold War context, resulting in a much more accurate appraisal of the Guatemalan political situation. After Árbenz’s election the Latin American context disappears completely form the CIA assessments. Árbenz’s cooperation with the communists on programs like Decree 900, the communists’ rising popularity and their apparent influence on the new president and Guatemalan politics in general are by then all ‘Cold War events’ in the eyes of the agency. After this ‘detection of

58 Cullather, 26. 59 Outline Briefing from Global Survey Group, 3.

24 Communism’ and the reputed communist (meaning Soviet) control over Guatemala, Cold War thinking lies at the heart of the CIA assessments of the situation in the country. Schlesinger and Kinzer present a thorough analysis of the position of the Guatemalan communist party in ‘Bitter Fruit.’ It is recognized in all studies on the Guatemalan coup that the Guatemalan communists exerted most influence in agrarian matters, most notably in the Decree 900. However, the staff of the governmental ‘agrarian department,’ the department responsible for this reform, numbered only 26 communist party members out of a total of 350. Of the 56 seats in the Guatemalan Congress, only 4 were held by communist party members, while 47 seats were held by members of more moderate and liberal parties, leaving the remaining 5 seats in hands of the conservatives. On lower level posts the communists were also poorly represented: “no more than seven or eight Communists ever held significant sub- cabinet posts, and neither Arévalo nor Árbenz ever appointed a single Communist to his cabinet.”60 The party itself had a meager 4000 members. However, in spite of their small numbers, the Guatemalan communists definitely exerted influence on Guatemalan politics. They worked closely together with the president and many well-known and high-ranking communist leaders were among the personal friends of the president. Most importantly, the communist party had considerable control over the powerful urban labor movement, which gave them substantial power in the cities. But as historian Cole Blasier commented on this influence: “Influence is one thing; control is another.”61 Árbenz needed this communist influence in order to carry out his reforms, as has been mentioned earlier. The fact that the communists shared some of his goals and that the president welcomed their support was evidence for the CIA of their enormous influence, rather than the logical result of the Guatemalan political reality.62 The CIA assessment of the influence of the Guatemalan communist party is well documented in a December 1953 report called ‘Stage One Report Annex A – Nature of the Enemy.’ In this report the communist party is portrayed as being firmly in control of all labor organizations and unions that are active in Guatemala. The party’s leaders are said to be under direct control of Moscow, though the only evidence given for this are visits of these leaders to the Soviet Union. The modest size of the communist party is acknowledged in the report, but despite its meager numbers the party’s influence is considered to be extensive. A list is given identifying the goals set out by the party, in which terms like ‘infiltrate’ and ‘control’ appear

60 Schlesinger and Kinzer, 59. 61 Ibid. 62 Cullather, 24-25.

25 regularly. Some of the listed objectives include “to make Guatemala a Communist beachhead in semi-colonial Latin America; to neutralize or destroy U.S. interests and influence in Guatemala; to infiltrate and continually increase control and influence over the national life of Guatemala;” and last but not least “serve the current Soviet Line.”63 These rather extreme goals seem to be considered as being logical aims for any communist organization, as there is no reference to any substantial evidence to support these supposed goals. Evidence or no evidence, this is the rhetoric the CIA used to describe the communists and their goals in Guatemala. The emphasis lay on the immediate threat the communists posed to United States national security and how this threat would only grow should Árbenz be allowed to continue his policies. When even the more moderate elements of the United States government began to be concerned about Árbenz and his land reforms, the CIA had increasingly less difficulty in convincing the American government that Árbenz simply had to be removed. The mere thought of possible communist elements in Guatemala, which also according to the United Fruit Company were active in the country, was considered to be a major threat to the security of the region and with it, the United States. Accordingly, the Arévalo administration and especially the Árbenz administration were no longer viewed as democratic and nationalist, but as in danger of being taken over by communist elements or having already been ‘hijacked’ by communists. This theory was considered increasingly ‘realistic’ in an increasingly ‘McCarthyite’ America.64 This image of a communist takeover in Guatemala was strongly influenced and for a large part created by the CIA. The agency’s assessment concerning Arévalo differed greatly from that of the State Department. With the election of Eisenhower this disagreement was overcome, as the United States would conduct a more active policy concerning ‘communist expansion,’ which would become known as ‘Rollback.’ The CIA’s role in this policy, its differences with the State Department and its role in the sudden change in the perception of Guatemala will be treated in chapters two and four.

63 Stage One Report Annex A – Nature of the Enemy, 6-13. 64 Cullather, 14-16.

26 Chapter 2 – The Actors: The United States

In this chapter some of the most influential American actors and ‘parties’ that played a role in the 1954 coup will be studied individually. The focus will be on their background, policies, goals and ‘modus operandi.’ These will include the American presidents Harry Truman and Dwight Eisenhower, the State Department and the Secretary of State, the United Fruit Company and the Central Intelligence Agency.

United States presidents Truman Harry S. Truman (president from 1945 until 1953) assumed the presidency as incumbent Vice-President when Franklin Delano Roosevelt died after his health had steadily declined for some time. During his first term as president, Truman was confronted with the emerging post- World War II world: the war was already coming to a successful end in Europe, and the creation of the atomic bomb would be the key to successfully ending it in the Pacific. Towards the end of the war the alliance with the Soviet Union came under pressure, as Soviet leader Joseph Stalin had always been distrusting of his Allied partners, and the Western leaders, Winston Churchill especially, had always considered Communism to be a great threat. After the war was won, tensions started to rise. Meanwhile domestic labor disputes resurged directly after World War II, putting a lot of pressure on Truman as his approval ratings were dropping.65 However, Truman managed to win the 1948 elections, perhaps the most surprising victory of all United States presidential elections, as Truman was expected to lose to Republican candidate Thomas E. Dewey according to every prediction and poll.66 Directly after Truman’s reelection a series of events caused a rapid escalation of Cold War tensions. In 1948 the Berlin Blockade was implemented by the Soviet Union in an attempt to obtain de facto control of the city of Berlin, which was controlled by all four Allied-occupying powers. A year later, in August 1949, the Soviet Union successfully tested its first nuclear weapon, matching the military potential (in terms of destructive power) of the United States, which until then was the only country in the world with a nuclear weapon. In October 1949 China ‘fell to Communism’ as Mao Zedong proclaimed the People’s Republic of China, which came as a shock to the United States who had supported the Nationalist

65 Richard J. Barnet, Roots of War (New York: Atheneum, 1972) 39-40. 66 John Ranelagh, The Agency. The Rise and Decline of the CIA (New York: Simon and Schuster, 1986) 121- 122.

27 government of Chiang Kai-shek. These events, followed by the Korean War in 1950, caused a serious escalation of Cold War tensions and an abrupt change in the American perception of world and regional events, as has been mentioned in chapter one.67 With the Cold War already clearly heating up prior to these events, President Truman had already outlined his approach to the Cold War and with it his foreign policy. Truman believed that the spreading of (Soviet) Communism had to be prevented and that the United States had to play an active role in this (instead of returning to an isolationist policy). In order to accomplish this the American president composed the ‘Truman Doctrine,’ which became the foundation of Truman’s foreign policy. The American president believed that the best way to contain Communism was for the United States to provide militarily and economic aid to any country or region that was the target of (Soviet) communist aggression.68 As the main aim of this policy was to ‘contain’ Communism within its existing territory, the Truman Doctrine is also referred to as ‘containment.’ The economic support would be an important pillar of containment, of which the Marshall Plan (officially called ‘the European Recovery Program’) is a good example: Truman deemed economic aid as a vital part of any defense against communist expansion. The creation of NATO can also be seen as a result or part of the Truman Doctrine.69 The development of United States foreign policy vis-à-vis Central America follows a similar line to the overall American foreign policy. Truman initially continued Roosevelt’s initiative of the so-called ‘Good Neighbor Policy,’ even though implementing the policy was problematic from the outset. With this policy Roosevelt had made an attempt to improve relations with the Latin American nations after decades of United States interventionist policy. As the name of the Good Neighbor policy suggests, Roosevelt attempted to move away from this interventionism and instead wanted to conduct a policy in which the United States would act as a ‘good neighbor’ to its Latin American neighbors.70 Also, in the aftermath of World War II democratic revolutions throughout the world were welcomed in this period of ‘democratic intoxication.’ The initial American response to the Guatemalan 1944 Revolution is in line with this ‘Good Neighbor Policy’ and general enthusiasm about Democracy being on the rise. However, as the Cold War intensified in the years after World War II, essentially all of the United States foreign policy was put in a Cold War frame. Latin America was no longer looked at and approached as a separate and unique region. From now

67 Ranelagh, 98-100. 68 Ibid, 127-128. 69 Ibid, 131, 135. 70 Immerman, 11. Cullather, 31.

28 on the main principles of American foreign policy, centered on the Cold War oriented Truman Doctrine, would be the starting point for all foreign affairs. The sudden change in the United States perception of Guatemala must be seen in light of this overall shift.71 Towards the end of his presidency Truman had already decisively moved away from Roosevelt’s ‘Good Neighbor Policy,’ as the decision to intervene in Guatemala had already been made with the approval of operation PBFORTUNE in 1951, which was cancelled due to it having been compromised before it was carried out. The intervention was then effectively put on hold until the election of Dwight D. Eisenhower as president.72

Eisenhower Dwight D. Eisenhower (president from 1953 until 1961) won the presidential elections of 1953 in a landslide victory and assumed the presidency in January 1954. He enjoyed widespread support as one of the best-known and most popular American generals of World War II, having been Supreme Commander of the Allied forces in Europe. Eisenhower had advocated a different approach to the Cold War and foreign policy than Truman during the 1952 elections. Eisenhower believed Truman had been too lenient in the fight against Communism, believed the approach was wrong and advocated a sterner foreign policy. Eisenhower wanted to drastically cut government spending and instead of maintaining a very expensive and large standing army, he looked towards America’s nuclear weapons as a powerful deterrent. He also wanted to cut back aid to Europe and instead deemed trade to be the best type of support that could be given in order to rebuild the continent and at the same time ‘keep Communism out.’ Eisenhower intended to ‘take the fight to the communists,’ actively trying to reduce the ‘communist threat’ rather than just contain it. This reducing of Communism is referred to as ‘rollback.’ This new policy of Eisenhower became known as the ‘New Look’ policy.73 The New Look was a distinct break with the Truman Doctrine. When Eisenhower assumed the presidency the experiences and enormous cost of the still ongoing Korean War were an additional motive for him to want to move away from Truman’s policies. Instead of fighting Communism in the costly manner in which it was being done in Korea, Eisenhower would shift the focus of his rollback policy to the ‘Third World,’ as the attempts to rollback Communism in Eastern Europe and in China (and Korea) that were being made by the CIA

71 Cullather, 14-15. 72 Ibid, 28-31. 73 Tim Weiner, Legacy of Ashes. The History of the CIA (London, Penguin Books, 2007) 70-74.

29 proved to be utterly fruitless. Eisenhower turned to two main ‘tools’ to use in his version of Cold War policy (and with it his foreign policy): strategic nuclear weapons for deterrence and covert action for rollback. Building and maintaining nuclear weapons was much cheaper than constantly maintaining a large standing army throughout the American sphere of influence. However, actually using these nuclear weapons wasn’t a viable option as this would almost certainly provoke a response from the Soviet Union, as could large-scale deployment of troops: the nuclear arms race with the Soviets was already under way, severely limiting overt and conventional military action. Eisenhower saw covert action as the solution to this problem.74 The CIA had proved the potential of covert action with it successfully orchestrated the 1953 Iranian coup d’état in collaboration with the British, also known as operation TPAJAX (or ‘operation Boot’ in the United Kingdom). This successful operation, carried out during Eisenhower’s first year as president, gave the CIA an immense reputation-boost at the best possible moment, as the new president saw this type of operation as the perfect tool for rollback. Above all, this type of operation was incredibly cheap compared to any conventional military intervention. Covert operations had another advantage in this respect, as the fact that the operations were secret meant the United States could deny any involvement, severely limiting possible political or military repercussions.75 When Eisenhower assumed the presidency, the ‘road to intervention’ in Guatemala was already taken under the presidency of Truman. Eisenhower confidently continued down this path, encouraged by the successful operation in Iran.

United States State Department The United States State Department was the government body charged with foreign affairs. With the creation of the OSS and later the CIA, this position was challenged. The founding of the CIA and the new agency’s place in the Washington bureaucracy met with much resistance of existing governmental organizations, among which the State Department. When the OSS was initially disbanded, the State Department attempted to absorb the ‘research and analysis mandate’ of the OSS.76 The rivalry between the CIA and the State Department was fierce, as the very existence of the CIA and its tasks posed serious “challenges to the traditional

74 Immerman, 13-14. 75 Ranelagh, 230. 76 Ibid, 99-100.

30 supremacy of the State Department in foreign policy formation.”77 This rivalry will also be treated in chapter 4. Two Secretaries of State are of importance in respect to the Guatemalan coup d’état: Dean Acheson, who was held the post from January 1949 until January 1953, and John Foster Dulles, who held it from January 1953 until April 1959. Acheson was a fierce supporter of Truman’s containment policies, as he saw the Soviet Union as a major threat. He also was one of the State Department’s strongest advocates for the creation of State Department controlled ‘coordinated intelligence’ after World War II.78 With the election of Dwight D. Eisenhower as president came a new Secretary of State: John Foster Dulles. The new Secretary was a true ‘Cold Warrior’ and believed that in the post-World War II world the United States would be caught up in a worldwide struggle with the Soviet Union and Communism, as he considered the Soviets as the controlling force behind any and all communist or socialist movements. In this respect his views did not differ much from Acheson. He also was a strong supporter of the idea of containing Communism, but he vehemently criticized Harry Truman’s attitude vis- à-vis the Soviet Union, which he considered to be weak and was a strong supporter and one of the main executors of Eisenhower’s rollback. John Foster Dulles’ relationship with the CIA and its director, his brother Allen Dulles, will be treated below. In all existing studies of the 1954 Guatemalan coup d’état a lot of attention has been paid to John Foster Dulles’ connection to the United Fruit Company. This connection is so obvious (and dubious) that it cannot be ignored. Dulles had worked as a senior associate for the law firm Sullivan and Cromwell, which had represented the company for many years and on many occasions (most notably in the signing of the ‘Guatemalan contract’ with Jorge Ubico). This connection to the United Fruit Company prior to his appointment of Secretary of State raises, to put it mildly, some questions as to Dulles’ exact motivation to advocate the removing of the Árbenz regime.79 As mentioned earlier, it also gave the impression of a strong influence of the United Fruit Company on the State Department in regard to the ‘shunning’ of the Guatemalan revolutionary governments. It is probably safe to assume that Dulles would have had sympathetic feelings towards United Fruit due to this connection, but in most studies too much of the motivation behind the decision to remove Árbenz has been accredited to this connection and similar ones within the American government. The CIA, the government and even the American public was already convinced of the communist nature of

77 Ibid, 183. 78 Ibid, 116, 125. 79 Gleijeses, 90, 236.

31 Jacobo Árbenz by the time Dulles was made Secretary of State by Eisenhower and the Cold War was already in full swing. In other words, the United States government was not short on excuses or reasons to remove the Guatemalan president beyond any potential sympathy for the United Fruit Company.80 Perhaps the most convincing evidence arguing that the American government showed United Fruit no special treatment is the United States Justice Department’s anti-trust lawsuit against United Fruit. The Justice Department had had its eyes on the United Fruit Company for many years already and had planned a court action against the company in 1951 for anti- trust law infringement. However, the Justice Department was asked to put its investigation and court action on hold until the dispute with the Guatemalan government was resolved. The State Department needed United Fruit to be strong and an anti-trust lawsuit would severely damage the company’s image and its position in the dispute.81 Historians have obviously seen this as a major sign of government help for United Fruit. However, after Árbenz had been ousted and Castillo Armas was president of Guatemala, the Justice Department went ahead with its lawsuit. The United Fruit Company was forced to sell many holdings and the company’s position continued to deteriorate in the following years. By 1972, United Fruit had sold all of its holdings in Guatemala.82

The Central Intelligence Agency The Central Intelligence Agency has its roots in the Second World War. During the war, President Roosevelt was concerned about United States intelligence gathering capabilities. Intelligence gathering was fragmented, as the War, Navy and State Departments gathered intelligence independently and were not prone to sharing this intelligence. Roosevelt wished to have a more centralized intelligence gathering organization to address this perilous shortcoming. In 1942 the Office of Strategic Services (or OSS) was formed, the CIA’s direct predecessor. This service was modeled after the British Secret Intelligence Service, also known as MI6. With the OSS an attempt was made to centralize intelligence gathering, but the existing departments and branches of the armed services were reluctant to give up control over intelligence gathering. Directly after World War II the OSS was disbanded, as Truman did not consider this type of agency to be necessary during peacetime and assigned the OSS’ tasks to the State Department and the then still existing War Department. However, the

80 Ibid, 361-363. 81 Cullather, 19. 82 Ibid, 118-119.

32 American president changed his mind quickly on the necessity of an intelligence agency with the Cold War already heating up in late 1945.83 Truman wanted to centralize not only intelligence gathering, but he also wished to centralize all matters of (military) defense into one department. This reorganization culminated in the 1947 National Security Act, which was passed on 26 July of the same year. The War and Navy Departments were merged into the Department of Defense and most importantly the Central Intelligence Agency was formed, which would be staffed by members of the State and Defense Departments. In short, the CIA was created to correct the shortcoming in the country’s intelligence gathering and coordination that had returned after the disbanding of the OSS. Besides the reorganization of the Navy and War Departments and the creation of the CIA, the National Security Council was created to centralize and coordinate all matters of national security. One of the most important questions surrounding the creation of a centralized intelligence agency was the question under what control this agency should be placed and whether it should be military or civilian. Truman eventually chose to make the agency a civilian organization under direct presidential control and organization, as “he had a traditional dislike of military domestic involvement – and he wanted an authoritative source of intelligence.”84 As mentioned earlier, the creation of this new agency was not welcomed by most of the existing American agencies and governmental organizations. The creation of the CIA meant for example that J. Edgar Hoover’s FBI got a competitor, as it would lose the intelligence gathering in Latin America to the CIA. Hoover would be (and remain) a staunch opponent to the CIA and repeatedly try to discredit the new agency.85 Moreover there was hardly any consensus in American politics directly after World War II if there was any need at all for an intelligence agency as worldwide peace was expected. The public foresaw no conflict with the Soviet Union – their wartime ally – in the immediate aftermath of the war and Truman had to consider this while deciding on the nature, structure and mandate of the CIA. By 1947 though, the question if there was a need for a centralized intelligence agency was no longer an issue, as historian John Ranelagh points out: “by the spring of 1947 the cold war was in full swing… Ominous tales of worldwide Soviet ambitions filled front pages. Letters and editorials reflected a growing anticommunist

83 Ranelagh, 99-101. 84 Ibid, 102. 85 Ibid, 114.

33 feeling.”86 This public fear of Communism paved the way for the National Security Act. Only Hoover repeatedly tried to prevent the act from being passed, but his efforts failed.87 The main task of the first ‘Directors of Central Intelligence,’ as the official title of the CIA director would be, was to get the new agency accepted in Washington, as both the State Department and the American military still opposed the idea of a civilian agency having the leading role in intelligence gathering and coordination. In order to accelerate this acceptance the third Director of Central Intelligence Roscoe Hillenkoetter (the first director of the CIA after it had officially been established with the passing of the National Security Act) gave up some of the power the CIA was given. The National Security Act assigned a leading role to the Director of Central Intelligence: “as executive agent, the director of Central Intelligence would have had day-to-day superiority over the heads of the other intelligence agencies.”88 The way in which this control, which was strongly opposed by other departments, was supposed to be exercised was not specified though and in order to smooth over the acceptance of the CIA Hillenkoetter gave up this executive role of the Director of Central Intelligence.89

Early operations and ‘corporate culture’ The CIA’s first years are characterized by a seemingly endless stream of daring (or perhaps delusional) operations. The CIA carried out covert operations in Soviet-held Eastern Europe, attempting to set up networks in case of an all-out war, to organize resistance, or to aid existing resistance groups, real or imagined. Practically all operations failed, with the agents dropped into enemy territory being captured and killed, or used to send misinformation to the CIA. The architect of these operations was Frank Wisner as head of the Office of Policy Coordination (or OPC, the agency’s covert operations division), who was unfazed by the continuous failures. However, due to the secret nature of the CIA and due to its organizational structure and mandate, these failures remained largely unknown to the American government and public. Wisner was able to operate and continue to his own judgment. This fruitless continuation of covert operations is aptly described by Tim Weiner:

All told, hundreds of the CIAs foreign agents were sent to their deaths in Russia, Poland, Romania, Ukraine, and the Baltic States during the 1950s. Their fates

86 Ibid, 109. 87 Ibid, 102-109. 88 Ibid, 112. 89 Ibid.

34 were unrecorded; no accounts were kept and no penalty assessed for failure. Their missions were seen as a matter of national survival for the United States.90

The Agency scored some successes, most notably the successful supporting of anti- communist parties in Italy and France during post-war elections and supporting the government of the Philippines in their fight against communist guerrillas. However, basically all clandestine operations failed miserably.91 The stubbornness with which especially Wisner continued carrying out covert operations that were sometimes obviously compromised from the very start is a telling example of the so-called ‘corporate culture’ within the CIA. The fact that hundreds of CIA operatives were sent to almost certain death was considered to be ‘part of the job,’ and seen as lessons learned without any regard for the human costs of such missions. The ease with which these often reckless missions were drawn up by a ‘civilian’ like Wisner is something that a military man like Walter Bedell Smith, who would be the agency’s next director, had trouble accepting.92

Reorganization: the Eisenhower administration The late 1940s were difficult for the CIA, as the new agency was severely criticized for not performing its task of gathering and directing intelligence, for example in the case of the ‘fall of China’ and the outbreak of the Korean War, which both came as a complete surprise to the United States.93 After ‘Korea,’ Truman replaced Director of Central Intelligence Roscoe Hillenkoetter with General Walter Bedell Smith who had made a name for himself during World War II. Under the leadership of Smith the agency was restructured and reorganized and he is considered as one of the best directors the CIA has ever had. Smith was brought in as a crisis manager and achieved a very effective reorganization of the CIA’s ‘analytical potential,’ which was the main point of criticism aimed at the agency, as John Ranelagh states:

The achievement of … Smith in reorganizing CIA’s analytical and estimating procedures was one of the most important in the agency’s history. It enabled the agency to overcome the stigma of ‘failure’ that had become increasingly associated with it during the Korean War. The reform carried out under Smith

90 Weiner, 47. 91 Ibid, 45-47. 92 Ibid, 45-48. 93 Ranelagh, 187-188.

35 cemented the agency’s position in the policy-making apparatus of the U.S. government.94

With the election of Dwight Eisenhower as president, Allen Dulles – who then was Deputy Director of Central Intelligence – replaced Smith as Director of Central Intelligence. Smith was not replaced out of any dissatisfaction over his performance as director. One of the reasons was his declining health, but more important was the policy shift that came with the new administration. John Foster Dulles was made Secretary of State, and he strongly recommended his brother to be the new Director of Central Intelligence. United States foreign policy would be enacted along the lines of Eisenhower’s New Look policy. In this policy the CIA would play an important role as “the arm of hidden force with which the United States could take direct action without the overt use of its uniformed services.”95 The administration therefore needed close cooperation between the Secretary of State and the Director of Central Intelligence, and the brothers would form a very efficient and powerful duo. With the appointment of Allen Dulles as the new Director of Central Intelligence the CIA got its first civilian director and along with it a strong connection to the State Department.96 Under the Eisenhower administration the head of the CIA, as Director of Central Intelligence, was given a more central role (and with it more bureaucratic power) than initially intended. In order to compensate for this increased power the director was, on paper, much more dependent on the support of the president than the Secretaries of State and Defense and therefore had much less direct freedom in his actions. But in the case of Allen Dulles this did not pose a problem due to his good relationship with Eisenhower and his brother as Secretary of State. As Director of Central Intelligence Allen Dulles became a very important part of Eisenhower’s foreign policy.97 Under the directorship of Smith, Wisner had more difficulty continuing carrying out covert operations, as Smith was very much opposed to this. At the end of Truman’s presidency covert operations seemed to be ‘going out of style’ due to the lack of success. Wisner essentially attempted to keep his covert operations from Smith, hoping to continue in the manner to which he was accustomed. Frank Lindsay, who was in charge of the covert operations in Eastern Europe under Wisner, even believed that ‘rolling back’ the Soviet Union in Eastern Europe could not be obtained by covert operations, as his experience with the

94 Ibid, 192. 95 Ibid, 130. 96 Ibid, 229-231. 97 Ibid, 347-348.

36 operations carried into Russia proved to him that they had no chance of success. However, with the Eisenhower presidency taking office this declining trend in covert operations was completely reversed. Lindsay noted: “this was not what Allen Dulles wanted to hear.”98 In his words, Allen Dulles was determined to continue with covert operations in order to ‘roll back’ Communism, as Dulles was a firm believer from the start of the Cold War that the Soviet Union and Communism could in fact be ‘rolled back’ by mean of covert operations.99 By 1953 however, the focus would shift from Eastern Europe to the ‘Third World.’100 As mentioned earlier, the CIA was initially created to be the coordinator of existing governmental intelligence gathering agencies and programs. The carrying out of covert operations was not really intended to be a part of its mandate or task. However, with the National Security Act (1947) and the Central Intelligence Agency Act (1949) the CIA was given extensive “exemptions from the normal congressional reviewing process.” As Marchetti and Marks state, these acts gave the CIA unprecedented freedom of action:

This … has provided the CIA with freedom to engage in covert action, the right to intervene secretly in the internal affairs of other nations. It has done so usually with the express approval of the White House, but almost always without the consent of Congress, and virtually never with the knowledge of the American people.101

Not only did the CIA use these acts to carry out covert operations, it made it one of its prime activities with which the agency attempted to promote and identify itself. This ‘obsession’ with covert operations became even more central to the agency when Allen Dulles became Director of Central Intelligence. These themes will be treated extensively in chapter four in the ‘Cult of Intelligence’ section. In the period prior to operation PBSUCCESS the CIA was ‘maturing.’ In 1953 the CIA carried out its first ‘major’ operation in collaboration with the United Kingdom: the 1953 Iranian coup d’état. This operation to overthrow the government of Mohammad Mossadegh and restoring the Shah in order to protect mostly British oil interests was considered a resounding success and gave the CIA a much needed and perfectly timed reputation-boost on which the agency would build on the coming years. Among other things, it greatly increased Eisenhower’s trust in the CIA, to which he turned to remove the ‘communist threat’ in

98 Evan Thomas, The Very Best Men. The Daring Early Years of the CIA (New York: Simon & Schuster, 2006) 73. 99 Weiner, 63-64. 100 Thomas, 71-74. 101 Victor Marchetti and John D. Marks, The CIA and the Cult of Intelligence (New York: Dell Publishing, 1980) 7-8.

37 Guatemala. The Iranian coup d’état and its influence on operation PBSUCCESS will be treated more extensively in chapter four.

The United Fruit Company The United Fruit Company was formed in 1899 with the merger of the Boston Fruit Company and Minor Keith’s railroad and banana ‘imperium.’ Boston Fruit was a major player in the banana business, and Keith had built and controlled many rail lines in Central America where there initially were none in an attempt to obtain a monopoly-like position in the region. The merger of these two companies created a very strong company, as Schlesinger and Kinzer described:

The new firm had considerable assets. Keith brought in his 112 miles of railroad in Central America… The newly created firm also owned 212,394 acres of land scattered throughout the Caribbean and Central America, of which 61,263 acres were actually producing bananas.102

During this period, underdeveloped land in the region could be bought for next to nothing, as the rulers of the countries in the region welcomed any money for this unused land. In the case of Guatemala it was dictator Manuel Estrada Cabrera who initially granted United Fruit very favorable deals. In 1904, he granted the company a concession to build and operate the national rail line for a period of 99 years. It was this type of deals made throughout Central America that enabled the United Fruit Company to build its monopoly in the region.103 The company was also accustomed to cooperating local rulers whose support they were able to buy when necessary. Because of this type of relationship with the rulers of Central America the United Fruit Company could exert an enormous amount of influence on the politics of the region and it grew accustomed to extremely favorable conditions in the countries where it had large holdings. The extent to which United Fruit had grown accustomed to the local rulers being loyal supporters of the company is illustrated by the initial confidence with which the Guatemalan Revolution of 1944 was greeted. At the same time the company did not see itself as a monopolistic giant that suppressed its workers through the abovementioned system of support from local rulers. In fact, the United Fruit Company saw itself as quite the opposite. Its workers enjoyed, at least on paper, better conditions than workers on non-United Fruit plantations. The company saw itself as an enlightening influence on the countries where it had

102 Schlesinger and Kinzer, 67. 103 Ibid, 65-67.

38 plantations, as schools and medical facilities were built on its properties and United Fruit was genuinely offended whenever there were any strikes or protests against its policies regarding labor and working conditions.104 By 1944 the United Fruit Company had consolidated its monopoly in Guatemala after dictator Jorge Ubico granted the company extremely favorable land deals combined with very low taxation. It controlled the railroads and the only major port in the country through its subsidiary International Railways of Central America, and it was by far the largest landowner of the country. This position automatically made United Fruit the primary target of the reformist governments of Arévalo and Árbenz.105 The company fought back by attempting to sway the American government and the American public into believing the company was being harassed by communist governments. As Schlesinger and Kinzer state, “the company hired a corps of influential lobbyists and talented publicists to create a public and private climate in the United States favorable to Árbenz’s overthrow.”106 The man hired to do this was Edward Bernays, a successful and well-known public relations expert with personal ties to many leading American newspapers and magazines, and high-ranking government officials. Bernays was very successful in his attempts to influence American politicians and the public opinion concerning Guatemala.107 Apart from the ties and connections of Bernays, the United Fruit Company had many ties with the upper echelons of the Eisenhower administration as many government officials had either personal ties with the company or were shareholders. However, as mentioned before, with the Cold War in full swing the United States government was not short on excuses to present Árbenz as a threat to American interests, with or without the struggles of an American company in which elements of the government had personal interests. The fact that these ties with United States government officials were not of a decisive nature is illustrated by the fate of the United Fruit Company after 1954, as was mentioned earlier.108 As mentioned above, the virtual monopoly of United Fruit made it an obvious target of the reformist Arévalo and Árbenz governments. However, this position was completely ignored and neglected in the CIA’s analysis of the Guatemalan situation, as has been mentioned in chapter one.

104 Ibid, 68-71. 105 Ibid, 70-72 106 Ibid, 77. 107 Ibid, 79-81, 90-91. 108 Gleijeses, 361. Cullather, 118-119.

39 Chapter 3 – The Central Intelligence Agency’s ‘Modus Operandi’ and

Operation PBSUCCESS

Now that the Guatemalan coup d’état has been contextualized in the previous two chapters, the focus of this chapter will be the Central Intelligence Agency itself; operation PBSUCCESS and the way the agency executed it, it’s worldview, modus operandi and its relationship with the State Department and other government bodies. In the previous chapters and, as mentioned, in the existing literature it has been established that the CIA’s analysis of the situation in Guatemala was inaccurate to say the least. Working from this inaccurate analysis the agency did everything in its power to persuade the American government that removing Árbenz was the only option to prevent Guatemala from becoming a full-blown threat to the safety and stability of the United States and the entire region.

Guatemala – moving towards intervention Operation PBFORTUNE Not long after the implementation of Árbenz’s Agrarian Reform Law (or Decree 900) on June 17, 1952, the CIA started planning the overthrow of Guatemalan president Jacobo Árbenz. This land reform program can be seen as ‘the last straw’ in a series of reforms that finally brought the United States government to actively pursue the replacing of this troublesome president who was suspected of being communist, or at least a communist sympathizer. The Truman Administration was careful not to play too obvious a role, as it feared the political consequences should American involvement be suspected. The result of these reservations was operation PBFORTUNE. Its aim was to supply Castillo Armas with weapons and money enabling him to carry out a coup d’état seemingly without any outside (American) help. The operation was compromised though, as Anastasio Somoza of Nicaragua – who along with the Honduran and Dominican presidents supported the plan to overthrow Árbenz, whose policies they viewed as a threat to their own positions – spread word that the CIA would play a role in the coup. The Truman administration cancelled the operation, as the role of the United States was now almost impossible to keep secret. By the time PBFORTUNE was cancelled president Truman effectively had ‘one foot out the door,’ as he had announced he would not run for another term. Dean Acheson characterized these last 10 months of Truman’s presidency as a “virtual interregnum.”109 This put PBFORTUNE on hold for the remainder of

109 Cullather, 31.

40 Truman’s presidency while the CIA tried to keep the operation alive without any explicit governmental approval. The agency was able to keep Armas and his followers afloat until the election of Dwight D. Eisenhower as president.110 During this period the State Department and the CIA still had different views on the situation in Guatemala. The CIA was by now already convinced that the removal of Árbenz through a covert operation was the only option left for the United States, as leaving Árbenz in office would allow the Guatemalan communists to increase their influence over the government. The differences in opinion between the State Department and the CIA will be treated later in this chapter.

Gaining momentum: Iran 1953 As mentioned in chapter two, the CIA had a disappointing track record in the late 1940s and early 1950s (even though the amount of failures was a well kept secret), with the failure to predict the Korean War as a low point. The successful outcome of the Iranian coup d’état, or operation TPAJAX, of August 1953 gave the agency’s reputation a tremendous boost. As mentioned earlier, this reputation boost came at the best possible moment for the CIA, especially for the continuation of covert operations, as there was a ‘lull’ in the carrying out of such operations during the last stage of the Truman presidency. Eisenhower’s New Look policy with its strong emphasis on rollback reinvigorated the covert aspirations of the CIA. The newfound respect for and confidence in the agency would have an enormous impact on PBSUCCESS, and on the government’s decision to approve the operation. Kermit Roosevelt, grandson of Theodore Roosevelt and head of operation TPAJAX, stated that the new Secretary of State under Eisenhower, John Foster Dulles, was extremely pleased with the operation. Roosevelt recalled in an interview that Dulles “figured I could solve any problem anywhere in the world.”111 The Iranian coup d’état of 1953 is a good example of the CIA’s mindset of the period. A democratically elected president was removed from power by means of a coup in order to protect oil interests of British and American companies, as this democratically elected president intended to nationalize the oil companies. The strategic value of these oil interests combined with the leftist character of the elected president was enough to silence any moral objections to such a belligerent and anti-democratic act. The CIA firmly believed that it had the right, or even the task, to interfere in whatever country in the world in order to protect

110 Ibid, 29-33, 38. 111 Ranelagh, 264.

41 American interests, which they considered equal to the interests of the Western democratic world.112 The situation in Iran was considered by the CIA to be identical to the situation in Guatemala: a ‘communist’ president was trying to nationalize American-owned businesses. Accordingly, the agency intended to deal with the situation in Guatemala in the same manner. In fact, just as PBSUCCESS in Guatemala in the year following the Iranian coup, the operation itself was hardly an example of perfect operational planning and improvisation. The successful outcome of the operation was only a result of a series of fortunate turns of events that were not at all controlled by the CIA. These operational shortcomings were not evaluated in any way however, just as the near fatal operational flaws of operation PBSUCCESS would be ignored. Both operations would be celebrated as resounding CIA successes, neglecting both the fact that democratically elected governments were ousted and the long-term effects this had on both countries.113 Apart from the fact that the operation was considered a complete success, TPAJAX had been very cheap and completely in line with the New Look policy of Eisenhower. Furthermore, the situation in Iran appeared to be very similar to the situation in Guatemala: the United Fruit Company was in a similar position as the Anglo-Iranian Oil Company that was also the target of a reformist government. Roosevelt stated in the interview that he attempted to convince John Foster Dulles of the uniqueness of the situation in Iran during the operation, but that the Secretary of State did not seem to heed these cautionary remarks.114 In any case, the operation inspired confidence in the United States government that covert operations were an effective tool, and in the same month as the Iranian coup the National Security Council authorized covert action against Guatemala.115

The CIA’s analytical methods As has been established earlier, the CIA’s analysis was limited in its scope and one-sided. Any assessment or evidence suggesting the agency’s view on the matter was wrong or incomplete, was either ignored or simply dismissed as based on incomplete information: the agency knew best what was going on. When going through the CIA documents on the subject this one-sided view on Guatemala is clearly visible. As mentioned earlier, the CIA claims in the December 1953 document titled ‘Stage One Report Annex A – Nature of the Enemy’ that the Guatemalan communists are under direct control of Moscow. The only ‘evidence’

112 Barnet, 202-203. 113 Weiner, 91-92. 114 Ranelagh, 264. 115 Cullather, 38.

42 presented for this claim is that several communist leaders had visited Moscow at a certain point in time.116 In the same document, a list (composed by communist leader Fortuny) of the PGT’s goals in Guatemala is included. The main here focus of these goals is clearly on the Decree 900, and the list goes on declaring the improvement of living conditions, the fighting against foreign-monopolies, strengthening of unions and other reforms that have been mentioned earlier. These goals all were in line with assessments made, among others, by the World Bank and were hardly radical compared to other Democratic nations in the region, including the United States. However, to the CIA these goals were all part of the plan for a communist takeover: “In its totality this program can be seen as a shrewd adaptation of current Guatemalan conditions to the requirement of the long-range objective of Communist world domination and the intermediate aim of separating Guatemala from the Western powers.”117 The CIA then continues to claim that actual goals and tactics of the PGT include “be the vanguard in Guatemala of the grand strategy of world Communism, to make Guatemala a Communist beachhead in semi-colonial Latin America, to neutralize or destroy U.S. interests and influence in Guatemala,” and “serve the current Soviet line.”118 The agency appears to offer no other evidence for these claims than the mere ‘communist nature’ of the PGT and its leaders. This lack of evidence to support its claims is shown also in the September 1953 document titled ‘Guatemala – General Plan of Action.’ In this document the CIA makes similar claims as to the level of Soviet influenced subversion:

During the past few years Guatemala has become the leading base of operation for Moscow influenced communism in Central America. (…) Guatemala now represents a serious threat to hemispheric solidarity and to our security in the Caribbean area. (…) Guatemala maintains the balance of military power in Central America. This, coupled with communist subversive activities extending across the Guatemalan borders, is a matter of increasing concern to nearby States (…).119

Once again, no evidence for these activities is presented other than the simple statement that the ‘Guatemalan bureaucracy’ is controlled by communists, and that these communists are inherently under control of Moscow and are therefore hard at work to achieve global communist revolution.120

116 Stage One Report Annex A – Nature of the Enemy, 5. 117 Ibid, 10. 118 Ibid, 11. 119 Guatemala – General Plan of Action, 2. 120 Stage One Report Annex A – Nature of the Enemy, 5, 10-11. Guatemala – General Plan of Action, 2.

43 The reason for this analysis of the situation in Guatemala is that the CIA did not look at events in the country in its proper (Latin American) context, but rather in a Cold War context. When studying all the declassified CIA documents on Guatemala, the agency’s view on the country can best be described as ‘Cold War tunnel vision,’ amplified and in part created by ‘groupthink,’ mentioned in chapter one. In fact, the CIA looked at all world events through this tunnel vision. There are several explanations for this worldview.

The Red Scare As mentioned in both chapter one and two, United States foreign policy after World War II was completely attuned to the rising tensions of the Cold War. As became clear in chapter two, the CIA was founded during the tumultuous years directly after the war, when the change in the American (public) perception of the Soviet Union took place. The war was over but a new and far more dangerous enemy had replaced the old one and the stakes were even higher, as the Soviet communist goal was believed to be nothing less than world domination. As John Ranelagh put it: “with a world up for grabs and with the Soviet Union taking what it could get, the CIA was charged with laying the U.S. claim.”121 The newly found agency was expected to protect the United States and its interests by being the nation’s ‘eyes and ears’ in the world. Any potential (communist) threat to the United States had to be identified, analyzed and, if possible, neutralized before it could take hold. There was a general feeling of urgency, but not only because of the imminent threat the Soviet Union posed. There was a feeling after World War II that “the world was faster” and that decisive moments and battles would be quick, requiring an agency that was able to respond equally quick. This requirement added greatly to the CIA’s organizational structure and relative operational freedom.122 The rampant fear of Communism throughout American politics and society also directly influenced much of the CIA’s initial conduct and ‘culture.’ John Ranelagh perfectly sums up the ‘mission’ the CIA was given at its creation:

Created originally as an emergency institution to deal with a climate somewhere between war and peace, the CIA represented the determination on the part of the governing elite not to repeat history and not to allow America to retreat once more into its own hemisphere.123

121 Ranelagh, 119. 122 Ibid, 120. 123 Ibid, 118.

44 The CIA should not be seen as primarily a ‘product’ of World War II because it was the successor, or even a continuation of the OSS. World War II played a large role in the public’s and Washington’s feeling for the need of an intelligence agency, as the surprise attack on Pearl Harbor by the Japanese showed the weakness of United States intelligence capabilities and was a national trauma. The ‘determination that history that should not be repeated’ that Ranelagh speaks of in the quote above is a reference to and consequence of Pearl Harbor. However, if it had not been for the Cold War, Truman may not have obtained enough support for the founding of a peacetime intelligence agency, or at least not in the exact form the CIA was founded in. In fact, Truman had initially based his Truman Doctrine on the specific cases of Greece and Turkey. However, in order to obtain enough support for his policy he applied it globally, as such extensive support for ‘just’ Greece and Turkey would most likely not have been sanctioned. In doing so, Truman essentially obligated himself to intervene should any government anywhere in the world be ‘under attack from communists.’124 This influence of the Cold War and an (apparent) imminent conflict with the Soviet Union and worldwide Communism created the sense of urgency in which the agency was created.125 The Cold War tunnel vision of the CIA can in part be attributed to these circumstances in which it was founded.

‘Cult of intelligence’ As mentioned earlier, the political climate in the United States during the founding of the CIA and the pressure to produce results were an important factor in the creation of the agency’s tunnel vision. The CIA’s very own structure and its internal ‘culture’ also added to this. The Central Intelligence Agency was a prestigious organization that attracted some of the brightest minds in America, coming from many different scientific and academic fields. This prestige created an elitist culture in the agency that served as a huge attraction. One of the problems this prestigious work automatically brought with it had to do with the nature of the work: it was classified. This had a huge impact on the social lives of the agency’s personnel, as they could only speak of their work with their colleagues. William Colby, who was with the CIA from its founding, points out in his autobiography that this resulted in a sealed and close- knitted group with its own worldview, as the agency’s personnel “increasingly separated

124 Ibid, 123-127 125 Ibid, 114.

45 themselves from the ordinary world and developed a rather skewed view of that world… Out of this grew what was later named – and condemned – as the ‘cult’ of intelligence.”126 Within this cult of intelligence the CIA’s worldview was consolidated. Janis’ theory on groupthink, mentioned in the introduction, is perfectly applicable to this cult of intelligence: likeminded men confirmed each other’s views on political matters throughout the world. The agency was willing to use all means necessary to achieve its goals, all in the name of national security, while constantly lying about its operations and hiding them from the public and even from elements of the United States government. The CIA’s claim that this secrecy was necessary for the agency to do its job is rebuked by Marchetti and Marks:

The fact is that in this country, secrecy and deception in intelligence operations are as much to keep the Congress and the public from learning what their government is doing as to shield these activities from the opposition. The intelligence establishment operates as it does to maintain freedom of action and void accountability.127

As mentioned earlier, the CIA managed to hide its failures while at the same time exaggerating and mythologizing its accomplishments in order to generate (public) respect and to justify the agency’s mandate.128 A statement made by Henry Kissinger, referring to the CIA’s efforts to prevent Salvador Allende from winning the Chilean elections in 1970, best symbolizes the CIA’s cult of intelligence: “I don’t see why we need to stand by and watch a country go Communist due to the irresponsibility of its own people.”129 This type of arrogance in regard to the CIA’s apparent superior analytical qualities was an enormous influence on and one of the explanations for their ‘Cold War blinders.’

The CIA as an independent actor Disputes with the State Department and operating independently When comparing the CIA assessment of the Arévalo and Árbenz administrations to the initial assessments of the United States State Department, it becomes clear that at first the State Department did not agree with the CIA on Guatemala. Even though the State Department had definite concerns regarding Arévalo and Árbenz, the exact view on the presidents and how they were considered to best be dealt with was quite different from that of the CIA. The

126 Ranelagh, 198. 127 Marchetti and Marks, 6. 128 Ibid, 3-10. 129 Ibid, 48.

46 discrepancy between the State Department’s and the agency’s view on events in Guatemala – and in the rest of the region and the entire world – is remarkably well illustrated in a declassified Central Intelligence Group document titled ‘Soviet Objectives in Latin America,’ dated April 10, 1947. The Central Intelligence Group was the predecessor of the Central Intelligence Agency before it was officially founded on 26 July 1947 with the National Security Act. In this document the Central Intelligence Group depicts the Soviet Union as a very active and dangerous actor in Latin America. It also demonstrates that already in 1947 the agency considered Communism and communist movements to be inherently under the control of the Soviet Union. It almost seems that the CIA looked at the world and world events as though the only context that mattered was the history that had taken place since the end of World War II, or since its own its founding.130 This is illustrated by the ‘statement of dissent’ added to this analysis by the State Department, where the ignoring of any other factors such as economic and social developments and regional history is pointed out. In short, the State Department states that the existing evidence does not suggest such an immediate danger that the Central Intelligence Group identifies. Furthermore, it recognizes the CIA’s inclination to view events solely in a Cold War context as early as 1947, judging from this criticism on the agency’s analysis added to the document:

In discussing causes for gains in the Communist movement, the emphasis upon [the use of] propaganda and [Latin American] ‘ignorance’ conceals the importance of local conditions arising from such factors as economic distress, social maladjustments, and frustrated nationalism.131

Perhaps this disagreeing with the CIG so firmly must also be seen in the context of the ‘conflict’ in Washington surrounding the founding of the CIA, as the State Department had tried to obtain a central role in intelligence gathering and implementation. Nevertheless, with the election of Jacobo Árbenz the State Department started to grow concerned as well. Even though State shared the CIA’s concerns on communist activity and influence in Guatemala, it did not consider ‘regime change’ as the only option. The differences between the State Department and the CIA are demonstrated in the ‘National Intelligence Estimate – 62,’ dated March 11, 1952 and published in the original Foreign Relations of the United States series. In this estimate, just a few months prior to the implementation of Decree 900, it is concluded that “the political situation in Guatemala adversely affects US interests and constitutes a potential threat to US security.” It is clear from CIA reports and plans that the agency viewed

130 Soviet Objectives in Latin America, 1-6. 131 Ibid, p. 7.

47 all overt political and economic pressure on Guatemala to only be used in combination with an operation aimed at the deposing of president Árbenz.132 The State Department however, believes that Árbenz may yet be forced to abandon his reforms when confronted with such (overt) pressures, especially when the American government was to impose economic sanctions due to the Guatemalan economic dependency on the United States.133 One thing becomes abundantly clear from the abovementioned differing assessments: as the State Department is still looking for a diplomatic solution to the problem, the CIA has already made up its mind and has decided that a coup is the only remedy. This means that the CIA was making these assessments regardless of what foreign policy the American president and State Department dictated. This National Intelligence Estimate demonstrates the CIA’s independent role in the American apprehension of and political response to the Guatemalan government. Even though the agency was intended as an intelligence gatherer, advisor to the president and an instrument designed to be implemented according to presidential wishes, the CIA was clearly dictating its own line, although it was limited in implementing it. The CIA did not limit the planning of operations beyond the set foreign policy to the case of Guatemala: in the planning of the Iranian coup the CIA moved ahead without any presidential approval. Frank Wisner, head of the OPC (the covert operations division), blatantly stated about the Iranian coup that “the CIA makes policy by default,”134 while the OPC was obviously created to enact US policy rather than make it. However, due to the secret nature of the CIA and due to the lack of knowledge about its operations, the agency was able to operate in this manner.135 Some degree of independent planning and operating was expected of the CIA, as one of the tasks of the agency was also to advise the president on what action to take. The agency was therefore expected to have certain contingencies ready before presenting any options to the president, so a certain degree of independence in dictating its own line was expected of the CIA.136 However, the CIA was taking many liberties in their planning, which is well illustrated by the way Frank Wisner operated, as described above. The National Security Council did not authorize covert action against Guatemala until August 1953, but the CIA was preparing plans for covert action and making advanced preparations well before any such authorization was given. The agency would continue to

132 Guatemala – General Plan of Action, 6-9. 133 Foreign Relations of the United States 1952-1954, Volume IV The American Republics (Washington 1983) 1031-1037. 134 Weiner, 83. 135 Thomas, 39-41. 136 Ranelagh, 109-111.

48 advocate a ‘regime change’ in Guatemala, and when Eisenhower assumed the presidency the agency easily persuaded the State Department and American president that Jacobo Árbenz had to be removed from power.

Unanimity for intervention As mentioned earlier, the implementation of the Agrarian Reform Law, of Decree 900, is a turning point in the American government’s assessment of the Árbenz regime. Only two months after its implementation on August 18, 1952, the Truman administration approved operation PBFORTUNE. After the ‘interregnum’ during the last months of Truman’s presidency the National Security Council authorized direct covert action against Guatemala almost exactly a year later and the green light was given for operation PBSUCCESS. The shift in the State Department’s assessment of the Árbenz administration, the level of communist influence and control over the Guatemalan government is remarkable and echoes the CIA’s perception. The same rhetoric used by the CIA to describe the activities of the Guatemalan communist party was now also used by State. Even the labor disputes between the Guatemalan government and the United Fruit Company were suddenly credited to the communists and a Soviet communist line was recognized in the party’s goals and programs.137 One of the most logical explanations for this sudden adoption of the CIA assessment by the State Department is the change in leadership that followed the election of Eisenhower as president. The new Secretary of State John Foster Dulles and his brother, the new Director of Central Intelligence, Allen Dulles worked together closely and were united in their views. By 1953 it seems that both the State Department and the CIA viewed the problems of the United Fruit Company as instigated and “whipped up” by communists. Neither the CIA nor the State Department paid any attention to assessments speaking in favor of the Guatemalan reforms, made among others by the World Bank. The presence of influential communists made all other possible explanations or influences on policy irrelevant, as now the safety of the United States and the region was considered to be at stake. When on May 15, 1954 the Swedish freighter ‘Alfhem’ arrived in Guatemala carrying Czech weapons, any and all remaining reservations concerning the coup that might have remained dissolved completely. Ironically, the fact that Árbenz purchased Czech weapons came as a result of the United States imposed weapons embargo. Apart from buying Soviet weapons, the Czech weapons

137 FRUS 1952-1954. Guatemala, 56-63.

49 were Árbenz’s only option if he wanted to bolster his defenses.138 Unfortunately for the Guatemalan president, it only further weakened his position.

The National Security Council The decision making process that led to the intervention clearly indicates the initial dissension between especially the State Department and the CIA. Right up to the intervention itself it seems that the National Security Council is still contemplating diplomatic measures and sanctions to bring president Árbenz around. Whether or not these intentions were genuine when operation PBSUCCESS was already in such an advanced state remains uncertain, but a certain amount of disagreement about what type of measures should be taken does become apparent. The general notion on the policy the United States should pursue in regard to Latin America is to promote and to seek the incorporation of Latin America, especially Central America, into the ‘Western Hemisphere,’ economically, politically and militarily. The thought was that the forming of a unified and interdependent ‘block’ would avert any communist infiltration and would ‘call to order’ any president that had leftist tendencies.139 As time progressed and all political measures proved futile, and Árbenz continued along his reformist line, the National Security Council recognized the ‘threat to the United States National Security’ the situation in Guatemala posed, just as the CIA was claiming for a considerable amount of time. As the Alfhem arrived in Guatemala the options were once again discussed and a clear interventionist line was chosen, allowing the CIA to carry out operation PBSUCCESS.140 This moment can be pinpointed as the moment that President Eisenhower decided to follow the CIA’s advise on Guatemala, rather than the initial more diplomatic and cautious options that were discussed in the National Security Council estimates and outlines. The close relationship between the CIA and President Eisenhower enabled the agency to convince the American president of their view on the matter, which corresponded perfectly with his New Look policy.

Operation PBSUCCESS By the time the CIA was given the go-ahead to plan the overthrowing of Árbenz the situation had changed in Guatemala. The initial plan, PBFORTUNE, was no longer viable: the plan to only support an insurrection ‘from the sidelines’ by supporting Armas financially and

138 Ranelagh, 266. 139 Foreign Relations of the United States 1952-1954, Volume IV The American Republics (Washington 1983) 1075-1078. 140 Ibid, 1078-1084.

50 providing him with weapons was no longer an option, as in the ‘transitional period’ between Truman and Eisenhower during which PBFORTUNE was on hold, the Guatemalan opposition in the country itself had suffered great setbacks and was considered to be too weak to overthrow Árbenz on its own. Because of this weak position the opposition was in, a more active role for the CIA was necessary. The agency foresaw that much more direct support would have to be given and that many aspects of the coup would have to be run by the CIA, most importantly the psychological warfare aimed at discrediting the Árbenz administration and raising support for Armas and the opposition.141 The general outline of PBSUCCESS foresaw a period of ‘softening up the target’ by overt pressure on Guatemala by the United States government through economic sanctions, the cessation of military aid and discrediting Guatemala.142 The success of the operation was depending a lot on the popularity and effectiveness of Castillo Armas. When looking at the assessment of his potential in a CIA report on ‘friendly assets’ in Guatemala, it becomes clear that the agency was far from confident in the abilities of Armas. The CIA was clearly concerned by his ‘lack of experience’ in military operations and in politics, questions his exact motivations and is uncertain about his political ambitions. However, the agency concludes that he is the only viable candidate to lead the opposition in a bid against Árbenz, and his clear pro-United States and anti-communist political views apparently are enough.143 The main problems that had to be overcome were centered on support for Armas and control over the Guatemalan army. Armas would need a military force in order to seize the Guatemalan capital and effectively overthrow Árbenz. Armas’ force consisted of only 300 men and the Guatemala City garrison consisted of roughly 3000 well-equipped soldiers loyal to Árbenz. If Armas was to be successful, this loyalty to Árbenz would have to be broken by ‘turning’ the Guatemala officer corps. The CIA planned to achieve this with ‘psychological warfare.’144 The CIA distributed propaganda by means of creating a radio station based in Florida, which presented itself as broadcasting from within Guatemala, giving the impression of a strong and well-organized oppositional movement. The agency also financially supported opposition groups in Guatemala by spreading their propaganda against the Árbenz administration. The successful targeting of the army proved to be the decisive factor in the operation, as the Guatemalan officer corps chose to abandon president Árbenz during a

141 Guatemala – General Plan of Action, 4-6. 142 Ibid, 7. 143 Stage One Report Annex B – Friendly Assets and Potential, 6-8. 144 Ibid, 7-10.

51 decisive moment in the coup. However, it was not anti-government propaganda that eventually ‘turned’ the army. As mentioned in chapter two, the CIA convinced the Guatemalan army, as well as the government, that the United States would be willing to commit American forces should Castillo Armas’ coup fail. The Guatemalan officers corps was effectively faced with two options: either support president Árbenz and be defeated by the United States Army, or prevent a confrontation with the Americans and support Castillo Armas. The latter option was obviously a more appealing one, as the Guatemalan army would remain intact and with it, its power and influence. This successful ‘turning’ of the Guatemalan army proved to be the key to success, as Armas’ drive for the capital got almost immediately bogged down as he failed to advance beyond the border region of Guatemala and was in danger of being annihilated by the Guatemalan army. Should the Guatemalan army have stayed loyal to Árbenz, the coup would certainly have failed.145 Despite the precarious position of the invading rebel army after having suffered several defeats at the hand of the Guatemalan army, Árbenz realized his position was untenable when he lost the support of the Guatemalan officer corps, and capitulated on June 27, 1954. His abrupt capitulation came as a complete surprise, as Armas was still a long distance from the capital.146 Operation PBSUCCESS was a success, but not as a result of a perfectly planned and executed operation. In regard to the situation in Guatemala, the only assessment the CIA made that appears to have been correct was its assessment of the Guatemalan army. The fact that the army was such a major target of the operation is what eventually ‘got the job done,’ albeit just barely. The CIA’s evaluation of the operation will be treated at the end of this chapter.

Operation PBHISTORY and the aftermath of PBSUCCESS After the sudden capitulation of Jacobo Árbenz the CIA saw a unique opportunity. Due to the fact that Árbenz’s stepping down came as a surprise, the agency believed that it would have been virtually impossible for the Guatemalan communists to destroy any evidence regarding their activities and their connection to Moscow. Naturally, any evidence of Soviet influence and involvement had an enormous value as propaganda and would deliver hard evidence of the communist nature of the Árbenz government. In order to exploit this opportunity a team was formed to collect all this evidence. This ‘follow-up’ operation would be called

145 Cullather, 95-96. 146 Ibid, 132.

52 PBHISTORY.147 The gathered evidence would be used to identify and track all communists in Guatemala, and to inform the public of the extent to which the communists had infiltrated the government. Both efforts were already underway and were a part of operation PBSUCCESS and were called operation KUFIRE and KUGOWN respectively. Operation KUGOWN was primarily the ‘follow-up’ propaganda component of the psychological warfare aimed at convincing the public opinion in Guatemala and the rest of the world of the communist nature of the Árbenz administration.148 The results of PBHISTORY were disappointing. The headquarters of the Guatemalan communist party and labor organizations were in chaos, as they were already plundered. No ‘smoking gun’ concerning Soviet interference was found, as Cullather points out: “Ronald M. Schneider, an outside researcher who later examined the PBHISTORY documents, found no traces of Soviet control and substantial evidence that Guatemalan Communists acted alone, without support of guidance the outside the country.”149 In other words, no evidence was found of the severe threat that Guatemalan communists posed to the United States and the region due to their connection to Moscow. The PBHISTORY team gathered a total of 150,000 documents, which were distilled into a booklet and were used to make a press kit that was made available to the international press. The materials provided had the desired effect only in Guatemala itself, as the international press did not pick up the story and was skeptical of American claims of Soviet involvement.150 The frustration that was caused by this in the CIA is illustrated best by what is perhaps one of the most extraordinary details of the Guatemalan coup d’état. In an attempt to attract attention to the efforts made by the PBHISTORY team, a plan was drafted that would stage an attack on the research team’s headquarters in Guatemala. This staged attack would then be blamed on communists who ‘were covering their tracks.’ This action is mentioned in a summary report on PBHISTORY and it is stated that it was “abandoned when it was found that too many indigenous person would have to be in the act. Such an operation would have undoubtedly hit the international cable services, but was too risky considering all factors.”151 All in all, operation PBHISTORY failed, as Max Holland points out in his article ‘Operation PBHISTORY: The Aftermath of SUCCESS’ that the operation failed “in its most vital purpose – to persuade Latin America to

147 Holland, 300-332, 301-302. 148 Ibid, 300-332, 309-310. 149 Cullather, 107. 150 Holland, 310-311. 151 PBHISTORY Summary Report, 10.

53 look at Communist penetration of the hemisphere from the standpoint of the Untied States.”152 It would be the exact opposite. Despite the disappointing result of operation PBHISTORY, the CIA considered PBSUCCESS to be a huge success. President Eisenhower was stunned that the operation had been a complete success at so low a cost. Cullather points out that the sudden success of the operation after the unexpected capitulation of Árbenz had cast aside any potential criticism on the operation. Right up until the moment that Árbenz stepped down, the outcome of the operation was uncertain. The Guatemalan army was still in the position to crush Armas’ force near the border, which would have been the end of PBSUCCESS. Cullather goes as far to essentially dismiss the entire operation as a poorly planned and risky venture:

Had the Guatemalan Army crushed Castillo Armas at Chiquimula, … investigations would have uncovered the chronic lapses in security, the failure to plan beyond the operation’s first stages, the Agency’s poor understanding of the intentions of the Army, the PGT [the communist party], and the government, the hopeless weakness of Castillo Armas’ troops, and the failure to make provisions for the possibility of defeat.153

Instead, the CIA and the Eisenhower administration considered PBSUCCESS to be such a successful operation that it would be used as a blueprint for future operations, the most notorious one being the Bay of Pigs invasion in 1961 which showed the same principle flaws that Cullather identifies in PBSUCCESS.154 The United Fruit Company initially seemed to benefit from the ousting of Árbenz, but the company has to be considered a loser of the coup in the long run as the company lost its monopoly in the years following operation PBSUCCESS. This was for a large part due to the anti-trust lawsuit that was initially put on hold during the conflict with Árbenz, but was nevertheless carried out after the operation was a success. The company was forced to sell its railroad holdings and had to pay its workers higher wages. As United Fruit’s position continued to deteriorate, the company sold its remaining holdings in Guatemala in 1972.155 In the end the CIA ousted a democratically elected president because of the fact that its analysis of the political situation in the country was flawed due to the Cold War context the agency used when looking at world events and the tunnel vision that resulted from this context. The CIA believed the communist party in the country had extensive influence on the politics of

152 Holland, 300-332, 321. 153 Cullather, 109. 154 Ibid, 109-110. 155 Ibid, 118.

54 this president and was steadily taking over the country. This automatically meant that the Soviet Union was about to obtain a beachhead in the United States’ own backyard. Jacobo Árbenz would be replaced by Castillo Armas, who moved Guatemalan politics away from all the reforms and principles of the 1944 Revolution – a revolution that was based on American principles and democracy. Armas was assassinated in 1957 and shortly after the country slipped into a bloody civil war that lasted until 1996 and cost the lives of around 200,000 people. This civil war is seen as a result of the chaotic political situation that resulted from the ousting of Árbenz, as the United States replaced this popular president with a dictator who was assassinated just three years after the coup.156 The United States unfortunately did not learn from its mistakes in Guatemala and many operations like PBSUCCESS would be carried out in Latin America against leftist governments.

156 Ibid, 113-117.

55 Conclusion

Operation PBSUCCESS is one of the most controversial CIA operations to date. The Central Intelligence Agency orchestrated the ousting of a democratically elected president based on the agency’s analysis that the country’s communists, supported by the Soviet Union, were steadily taking over the country. Even the Guatemalan president Jacobo Árbenz was deemed a communist or in the least, as the CIA itself called it, a ‘pseudo-communist.’ Not only did the president openly associate and collaborate with the Guatemalan communist party, his reforms also directly targeted American interests in the country. His Agrarian Reform law meant the United Fruit Company would lose a substantial part of its holdings in the country, which prompted United Fruit to complain loudly that it was the target of discriminatory and communist policies especially designed to attack this American company.157 In the existing literature on the 1954 Guatemalan coup d’état the American operation is unanimously condemned as a flagrant example of the United States intervening an a Latin American country because it considered its interests to be threatened. There is some disagreement on the role and influence of the United Fruit Company, and if the United States would have deemed a coup to be necessary should there have been no American companies active in Guatemala. Generally speaking though, the prevailing opinion in the existing literature is that the United States would have carried out operation PBSUCCESS regardless of the plight of the United Fruit Company, because it viewed Guatemala to be a threat to American national security due to the supposed communist control over the country. The fear of communist infiltration and expansion that is displayed here characterizes this period of the Cold War.158 In the existing literature the CIA has usually been identified as solely the ‘enactor’ of United States policy set out by the president and State Department. The agency played a much larger role though and should be seen as an independent actor with its own views, goals and interests. Nicholas Cullather points out this ‘deficiency’ in the existing studies on PBSUCCESS in his book ‘Secret History.’ Cullather had access to previously classified CIA documents from which this independent role becomes apparent. However, as his book was intended as an internal CIA history of operation PBSUCCESS, Cullather’s focus is on the

157 Gleijeses, 360-363. 158 Cullather, 7-9.

56 operation itself rather than the role of the CIA compared to that of the State Department and the American government as a whole.159 After studying the declassified CIA documents and the original and complementary editions of the Foreign Relations of the United States series concerning Guatemala, this independent role of the CIA can be easily discerned. From the CIA assessments it becomes clear that from an early moment on, the agency considered a ‘regime change’ as the only effective measure against the administration of Jacobo Árbenz. It came to this conclusion long before the State Department, indicating that the CIA made its own assessments, regardless of the ‘foreign policy line’ formed by State. This is illustrated by the fact that the agency stressed that it believed all possible overt measures that the United States could take against Guatemala, such as economic sanctions, would only serve to strengthen the communists in the country. Therefore the CIA only considered this to be an option if any overt pressure on the Árbenz administration would be combined with covert measures aimed at overthrowing the president, while the State Department still believed that Árbenz could be pressured into changing his policies by such sanctions.160 With the election of Dwight D. Eisenhower and the implementation of his New Look policy, the CIA would be given a much larger role in the active combatting of Communism. Eisenhower wished to cut government spending, and covert actions carried out by the CIA would be much cheaper than maintaining and using a large standing army. The CIA’s harsh assessment of the Árbenz regime and its proposed solution to this problem fitted perfectly in this new policy of Eisenhower. The new American president appointed the Dulles brothers, John Foster and Allen, as Secretary of State and Director of Central Intelligence. The brothers would work together closely and the CIA’s assessment of Guatemala would prevail: the Árbenz administration would be overthrown by the Central Intelligence Agency.161 The decision to carry out operation PBSUCCESS was based on an assessment that was one-sided and limited in its scope. The CIA’s analysis was flawed and any evidence that supported another interpretation was simply brushed aside. The way the agency looked at the events in Guatemala can be best described as ‘Cold War tunnel vision,’ as the events were put solely in a Cold War context while the local and Latin American contexts were completely ignored. This tunnel vision becomes apparent when the assessment of Árbenz himself is studied. In the existing literature on the Guatemalan coup d’état opinions on Árbenz differ

159 Ibid, xv, 7-9. 160 Guatemala – General Plan of Action, 6-9. Foreign Relations of the United States 1952-1954, Volume IV The American Republics (Washington 1983) 1031-1037. 161 FRUS 1952-1954. Guatemala, 56-63.

57 somewhat. It is pointed out that his true political convictions are vague and essentially unknown, as he has never made any definitive comments on this. His communist supporters and conservative opponents have always claimed he was a convinced communist, while his non-communist supporters claim he was a devout democrat who was misunderstood. Piero Gleijeses justly points out in his book ‘Shattered Hope’ that the question whether or not Árbenz actually was a communist during his presidency was essentially irrelevant to the American perception: Gleijeses states that the Guatemalan president simply appeared to be a communist. Árbenz was forced to work with communists in order to gain enough political support to carry out his land reforms. He worked closely with known communists, even though none of them held any high government positions. However, the fact that communists had ‘access’ to the president convinced the CIA that the communist party had much more influence on Guatemalan politics than their modest numbers implied. Any and all ‘exculpatory’ circumstances are irrelevant to the American assessment of Árbenz due to his association with communists, and so any potential explanation of his policies from a historical Latin American perspective of context were ignored.162 By the time Árbenz was elected president and his Agrarian Reform Law (or Decree 900) was enacted with help of the Guatemalan communist party, the problems of the United Fruit Company also became irrelevant: the CIA assessment was dictated by the agency’s Cold War tunnel vision. The influence of the communist party was seen as a sign that the communists had infiltrated the government and were taking over the country. This meant the Soviet Union was about to obtain a beachhead in the Western Hemisphere, which made it a matter of national security. The CIA’s Cold War tunnel vision can be explained by a number of reasons. The Central Intelligence Agency was founded after World War II during a period of rising Cold War tensions and a communist paranoia in American society. The agency was created to address the American shortcomings in its intelligence-gathering potential and efficiency. It was believed that this deficiency enabled the Japanese to carry out the surprise attack on Pearl Harbor. In short, the CIA was tasked with preventing another ‘Pearl Harbor.’ The CIA would be the successor to the World War II solution to this problem of deficiency, the OSS. The agency was expected to be the eyes and ears of the nation, to defend American interests throughout the world and to detect and prevent the Soviet Union from advancing its interests in the world. The CIA’s ‘mission’ stemmed directly from Cold War tensions, as initially after World War II the OSS was disbanded because it was believed that an intelligence agency of

162 Gleijeses, 363-363, 365-366.

58 this sort was unnecessary during peacetime. As the Cold War tensions started to rise, the need for centralized intelligence gathering and coordination was deemed to be vital. This feeling of urgency and impending danger had a large influence on the structural organization and mandate of the CIA.163 The Cold War not only influenced the Central Intelligence Agency. United States foreign policy would also be greatly influenced by the rising tensions. Under presidents Truman and Eisenhower the ‘containment of Communism’ lied at the heart of the American foreign policy, and with the latter’s New Look policy Communism would be actively combatted by means of covert actions like operation PBSUCCESS. Eisenhower would use the CIA as his tool to implement this important aspect of his Cold War foreign policy. Before the CIA would be given a more active role though, the agency suffered from a poor reputation during its early years due to its failure to predict events like the Korean War. The CIA appeared to be unable to perform its task, which unmistakably put pressure on the agency. Communism appeared to be making progress in the world, which amplified the Cold War tunnel vision as the United States had suffered several ‘public setbacks.’ With the successful 1953 Iranian coup d’état the CIA redeemed itself. The agency’s reputation rose to unprecedented heights, which convinced Eisenhower that covert action was the most efficient ‘tool’ available to the United States and the successful Iranian coup strongly influenced operation PBSUCCESS.164 Another explanation for the CIA’s Cold War tunnel vision can be found in the agency’s culture that amplified its worldview. The CIA was a tightly knit and closed organization that effectively lived ‘outside of American society.’ The work of the agency was classified and unknown to the public, which caused the agency officials to ‘stick together’ in their social as well as their professional lives, effectively isolating themselves from everyday American life. This meant that their own worldview was strengthened according to the symptoms of Irving Janis’ ‘groupthink,’ adding to their habit of looking at world events from a Cold War context only.165 As much as operation PBSUCCESS is considered to have been a mistake and operationally flawed today, the CIA and the Eisenhower administration considered it a resounding success. A troublesome regime was deposed without any large-scale bloodshed and at an incredibly low cost, and the United States did not appear to be directly involved.

163 Ranelagh, 102-112. 164 Ibid, 38. 165 Ibid, 198.

59 The CIA was in fact so pleased with the operation that it would come to serve as a blueprint for future operations like it, the most notorious one being the Bay of Pigs invasion. As the outcome of that operation suggests though, PBSUCCESS was far from the perfect operation it was thought to be. Not only was the CIA’s analysis of the situation in Guatemala flawed and simplified by putting it in a Cold War context, the actual operation itself was also poorly planned. Nicholas Cullather points out that due to Árbenz’s sudden capitulation the CIA failed to see PBSUCCESS’s operational shortcomings, which he points out to have been many. The outcome of the operation was far from certain and things might easily have gone the other way, in which event the CIA had no contingency plan. However, as the outcome of the operation was a success, the agency patted itself on the back and considered PBSUCCESS as a perfect operation. When the follow-up to PBSUCCESS, operation PBHISTORY, failed to produce the evidence of Soviet influence in Guatemala the CIA believed it would find, no questions were asked or new evaluations were made. The fact that the agency did not find the ‘smoking gun’ that would have justified its main reason for intervening in Guatemala, namely Soviet subversion, did not produce any critical internal review. The eventual key to the success of the operation is found in the role of the Guatemalan army. The CIA’s analysis of the army was basically the only correct one: the agency believed the army, or to be exact the officer corps, was the key to obtaining and holding power in Guatemala. Because of the importance the CIA ascribed to the army, the Guatemalan officer corps was a prime target of the agency’s psychological warfare. The army was convinced that the continued backing of Árbenz would mean the destruction of the armed forces and a large part of the country itself, as the CIA propaganda convinced the army’s leadership that the United States Army would intervene should Castillo Armas’ force be defeated. When Árbenz realized he lost the crucial support of the army he knew his position was hopeless and stepped down. As much as this aspect of the operation appears to be a success story, Cullather emphasizes that this is to be considered as a fortunate turn of events rather than the outcome of a carefully planned operation.166 The intention of this thesis is to demonstrate that the CIA’s ‘Cold War blinders’ dominated the agency’s assessment of the situation in Guatemala to such an extent that a coup d’état was the only possible outcome. It can be concluded that it was indeed the CIA’s Cold War tunnel vision that essentially predetermined the future of the Árbenz administration and with it, the reforms and ideals set out by the 1944 Revolution. All evidence suggesting that

166 Cullather, 109-110.

60 anything other than communist subversion and influence was behind the reformist Guatemalan government was either ignored or simply considered to be wrong. As the American ambassador to Guatemala John Peurifoy put it, “Communism is directed by the Kremlin all over the world, and anyone who thinks differently doesn’t know what he is talking about.”167 The CIA had identified Communism in Guatemala, so anyone stating that it was anything other than Soviet Communism being at the heart of Guatemalan policy ‘did not know what he was talking about.’ This included organizations like the World Bank and even American economists that considered the Guatemalan reforms to be a necessary and logical remedy to the backward economic system in the country. This general outlook on Guatemala and the analysis that came from it made all possible explanations of Árbenz’s policies or even his own political ideals and intentions irrelevant. Even the plight of the United Fruit Company became irrelevant, as with the identification of Communism in Guatemala, the ‘problem’ had risen to a whole new level: now it was a matter of the United States’ national security. Leaving Árbenz in power would mean the communists would increase in strength, which would lead to the Guatemala becoming an all-out communist state and with it, a communist beachhead in the Western Hemisphere. The CIA was not about to let this happen. The agency was hardly confident about the potential of its alternative to Árbenz, Castillo Armas, as becomes clear from a CIA report on ‘friendly assets.’ The agency was clearly concerned by Armas’ ‘lack of experience’ in military operations and in politics, questioned his exact motivations and was uncertain about his political ambitions.168 This prospect was apparently considered to be better than leaving Árbenz in power. The fact that in doing so the CIA had to overthrow a democratically elected government in the process was considered a small price to pay.

167 Cullather, 26. 168 Stage One Report Annex B – Friendly Assets and Potential, 6-8.

61

Bibliography

Primary sources

‘Foreign Relations of the United States’ series

Foreign Relations of the United States 1952-1954, Volume IV The American Republics (Washington 1983).

Foreign Relations of the United States 1952-1954. Guatemala (Washington 2003).

Declassified CIA documents (chronologically)

Soviet Objectives in Latin America (10/04/1947) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000256978.p df

Outline Briefing from Global Survey Group (18/01/1949) http://www.foia.cia.gov/sites/default/files/document_conversions/5829/CIA- RDP80R01731R001400150009-6.pdf

Personal political orientation of president Arbenz/possibility of a left-wing coup (10/10/1952) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000924149.p df

PBFORTUNE, Essential Element (01/09/1953) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000924025.p df

Guatemala – General Plan of Action (11/09/1953) http://www.faqs.org/cia/docs/124/0000135872/GUATEMALA--GENERAL-PLAN-OF- ACTION.html (Link to CIA FOIA site not working, document was downloaded from there though. This is alternative source).

Program for PBSUCCESS (09/11/1953) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000914731.p df

Stage One Report Annex A – Nature of the Enemy (15/12/1953) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000928375.p df

Stage One Report Annex B – Friendly Assets and Potential (15/12/1953) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000923959.p df

63 Memorandum of conversation - (Guatemalan) opposition to Arbenz Regime - (talk of Armas and other potential opposition leaders) (01/01/1954) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000914121.p df

Operational information - associates of president Arbenz (communist secretary of his wife as great influence, also Arbenz and army/communists) (23/02/1954) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000913241.p df

PBHISTORY Summary Report (01/10/1954) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000920057.p df

CIA's role in the overthrow of Arbenz (12/05/1975) http://www.foia.cia.gov/sites/default/files/document_conversions/89801/DOC_0000919933.p df

Secondary Sources

Books:

Barnet, Richard J., Roots of War (New York: Atheneum, 1972).

Cullather, Nick, Secret History. The CIA’s classified account of its operations in Guatemala, 1952-1954 (Stanford 2006).

Gleijeses, Piero, Shattered Hope. The Guatemalan Revolution and the United States, 1944- 1954 (Princeton 1992).

Immerman, Richard, The CIA in Guatemala. The Foreign Policy of Intervention (Austin 1982).

Janis, Irving L., Groupthink. Psychological Studies of Policy Decisions and Fiascoes. Second Edition (Boston: Wadsworth, 1982).

Marchetti, Victor and Marks, John D., The CIA and the Cult of Intelligence (New York: Dell Publishing, 1980).

Ranelagh, John, The Agency. The Rise and Decline of the CIA (New York 1986).

Schlesinger, Stephen and Kinzer, Stephen, Bitter Fruit. The Untold Story of the American Coup in Guatemala (Garden City, New York 1982).

Thomas, Evan, The Very Best Men. The Daring Early Years of the CIA (New York: Simon & Schuster, 2006).

Weiner, Tim, Legacy of Ashes. The History of the CIA (London, Penguin Books, 2007).

64

Articles

Holland, Max, ‘Operation PBHISTORY: The Aftermath of SUCCESS’, International Journal of Intelligence and CounterIntelligence 17 (2004) 300-332.

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