In light of the success of the covert plan in Iran, it was natural that such fictions would be transposed onto other cases around the world. Just as the Iran case was reaching its climax, American planners accelerated their plans to “save” another nation from the perils of communism. Just one week after the ouster of Mossadeq, the leading covert operations planners within the CIA agreed that among their next projects “Guatemala will have number one priority.” This was no mere accident of timing. The success in Iran had opened up a new vista for the CIA, which after all was still a fairly small and unproven agency. It was now possible to imagine a panoply of covert actions that could turn the tide of communist subversion around the world. Central America was the next front in this long twilight war, and Guatemala an especially vulnerable sector in what Ike thought of as the battlements of freedom.
And yet the Guatemalan case differed significantly from Iran. Roosevelt, the star of his own Persian drama, could weave a somewhat plausible story about the legitimacy of the shah, the links between the Tudeh Party and Moscow, and the crucial role of the United States in restoring the shah’s authority. In Guatemala there was no corollary. This was a small, poor agricultural nation whose principal source of wealth, its land, was owned by a tiny elite of plantation owners and foreign companies. From the start of the 20th century Guatemalan landowners and an authoritarian government had enriched themselves by growing coffee beans and bananas for export and by enticing investment from wealthy American bankers, industrialists, and corporations. The exploitative practices of one such commercial giant, the United Fruit Company, became a rallying cry for left-wing organizers and agricultural workers. In 1944, in the face of widespread unrest from teachers, students, and workers, the country’s dictator yielded power. Nationwide elections brought a moderately conservative government to power, which opened up a period of political reform in the country. Guatemalans were writing their own democratic story.
While the army and landed elites continued to wield strong influence in the country, after 1944 political parties flourished, unions were formed in many industries, and Guatemalans had high expectations of future reforms to the social and economic structure of the nation. A federation of workers’ unions was formed, and communist activists from other Central American nations found refuge in Guatemala. In 1948 leftist politicians formed the Guatemalan Workers’ Party, just at a time of extreme U.S. anxiety about the spread of communist political activity. Corporate interests looked with worry at the formation of labor unions and the spurring of worker activism. The United Fruit Company, owner of huge banana plantations in Guatemala and a company that relied on cheap, nonunionized agricultural labor, pulled strings in Washington to make sure the U.S. government was fully aware of the threats to their interests. By August 1950 CIA officials had locked in on Guatemala as a likely source of anti-American activity in the Western Hemisphere, though even they could not find evidence of direct Soviet interference there.21
In late 1950 a charismatic army colonel named Jacobo Arbenz Guzman, a man of progressive, even socialist views who had backed the 1944 Revolution, won the presidential election and took office on March 15, 1951. Though not a communist, he wished to see the glaring inequalities in his nation rectified through a major land reform project, and he counted in his government a number of prominent communist labor leaders. He was influenced by them and shared some of their views about the basic inequalities of the capitalist system. In June 1952 Arbenz signed Decree 900, which sought to expropriate mostly fallow and underused land from large estates, divide it into small parcels, and sell it to farmers. The former owners were to be compensated for their losses. Even the New York Times editorial page saw these reforms as “long overdue.” The paper argued that “in promoting social justice there should be a relatively fair distribution of the land”; it was wrong to tarnish the plan with the epithet “communistic.”22
These views were not shared by major private companies like United Fruit, which now waged an aggressive legal and economic campaign to try to force Arbenz to withdraw his proposals. Arbenz’s reforms were not directed from Moscow or part of some plot to create a Marxist utopia among the humid plantations of Central America. Arbenz wanted to bring modernity and development to his poor country by stimulating small farming and rolling back the predatory economic practices of large companies and their allies. But the local origins of his policies were lost on the U.S. government. In the highly charged atmosphere of the early cold war, this kind of aggressive land reform aligned with the state-sponsored social reform projects being imposed by socialist and communist governments around the world.
By the spring of 1952 the CIA had come to see Arbenz and his government as “a potential threat to U.S. security,” and the agency found a number of allies who shared its desire to be rid of the president. Col. Carlos Castillo Armas, a longtime rival of Arbenz who had launched an ill-fated and disorganized military coup in 1950 and later fled into exile in Honduras, regularly offered his services to anyone who would back him in launching an invasion of Guatemala. The strongman of Nicaragua, President Anastasio Somoza, approached American officials in July 1952 and proposed a plan to use Castillo Armas to oust Arbenz; the Americans just had to supply the weapons. President Truman authorized CIA director Smith to proceed with the plan, and a shipment of rifles, pistols, machine guns, and grenades was assembled in New Orleans for shipment to Castillo Armas. But word of the American support for a military coup leaked, and Truman called off the operation in October 1952. The fate of the Arbenz regime was going to be pushed off onto the new administration.23
Over the course of 1953 Guatemala moved rapidly up the ladder of concern. From being an irritant at the start of the year, this small “banana republic” took on menacing characteristics in the eyes of American officials. In January 1953 the State Department worried about the growing influence of the communists in Guatemalan politics and labor unions but believed that Arbenz had “the power to check or break the Communist organization at will.” The communists were small in number and still dependent upon the toleration of the regime. The American ambassador there, Rudolf Schoenfeld, considered the goal of the Guatemalan communists to be “the neutralizing of Guatemala” rather than turning the country into a Soviet beachhead in the Western Hemisphere. In March 1953 Eisenhower and his NSC staff approved a general statement of aims for U.S. policy toward Latin America that emphasized the need to encourage economic development in an effort to meet the basic desire of people for an improved standard of living. While the NSC called for the “reduction and elimination of the menace of internal Communist or other anti-U.S. subversion” in the hemisphere, it seemed inclined to believe that economic aid and cooperation were the tools best suited to that goal.24
During the summer of 1953 the picture changed. Allen Dulles, newly installed as CIA director, his director of operations Frank Wisner, Undersecretary of State Smith, and Secretary of State John Foster Dulles all grew apprehensive about the state of affairs in Guatemala and clamored for immediate action against the regime. They had intelligence showing that Arbenz was consolidating his position by rounding up various members of Castillo Armas’s network inside the country; he also tightened his alliance with the communist activists in the labor unions. Communist influence in the country and the government was “as great as ever,” according to one American reporter, and the noncommunist opposition had withered. Arbenz was growing stronger while Castillo Armas was languishing in Honduras, awaiting orders to strike. The government was also proceeding rapidly with its seizure and redistribution of United Fruit land holdings. In February the government announced a plan to seize 250,000 acres of the fruit giant’s land along the Pacific and in August took aim at another 174,000 acres on the Atlantic coast. The State Department framed the problem this way: “The immediate Communist objective is the elimination of American economic interests, represented in Guatemala by the United Fruit Company, the International Railways of Central America, and the Guatemalan Electric Company. The loss of t
hese enterprises would be damaging to American interests and prestige throughout Central America.” While it seemed that “the Communists are not seeking open and direct control of the Guatemalan Government,” their tactics served a nefarious purpose: “to convert [Guatemala] into an indirectly controlled instrument of Communism.”25
It was time to act. On August 12, 1953—the very same week that the CIA launched the Iran coup—the NSC gave Allen Dulles authority to implement a plan to oust President Arbenz. The scheme was optimistically labeled PB-SUCCESS and became the CIA’s “number one priority.” Wisner, who took command of the coup planning, instructed the new (and hard-line) American ambassador to Guatemala, John E. Peurifoy, that the CIA was “authorized to take strong action against the government of President Arbenz in the hope of facilitating a change to a more democratically oriented regime.” On September 11 Wisner sent a detailed plan of action to Allen Dulles for his approval. Describing Guatemala as “the leading base of operations for Moscow-influenced Communism in Central America,” Wisner stated that the CIA would now “reduce and possibly eliminate Communist power” there.26
PB-SUCCESS, as described by Wisner, would place Guatemala in an ever tightening vise: sending arms to anticommunist neighbors Honduras, Nicaragua, and El Salvador; using official channels to condemn any anti-American statements made by the regime and encouraging neighboring pro-U.S. states to isolate Guatemala; deploying “covert economic warfare methods targeted against oil supplies, shipping and vital exports and imports,” including attacking coffee exports; and unleashing a massive “psychological warfare operation” inside the country to destabilize the government. After this “softening up,” Castillo Armas and his band of U.S.-trained and armed exiles would invade the country and oust Arbenz in a “swift, climactic military action.” Just three weeks after the Iran coup, with that victory still casting a warm glow on covert operations, Allen Dulles read Wisner’s plan and approved it.27
As it turned out, though, Guatemala was a tougher nut to crack than Iran. The CIA possessed none of the advantages that the coup plotters in Tehran enjoyed. The Guatemalan Army was loyal to Arbenz; the president was popular and democratically elected; the exiles were discredited and perceived as right-wing opportunists; neither the CIA nor the exiles had penetrated the Guatemalan press, political parties, church, or bureaucracy and could count on no rallying of these institutions to the cause of Arbenz’s overthrow. The most powerful anti-Arbenz force in the country was a rapacious foreign corporation long linked to Yankee colonialism. Most damaging, in September Arbenz himself discovered the details of the plot from a defector from Castillo Armas’s group and rounded up a number of conspirators. How could the plan proceed under such unfavorable circumstances?
The answer is that the Eisenhower administration, having elevated Guatemala to such a high level of threat to the national security, had no alternative but to proceed, though with a badly compromised operation. “In view of the growing Communist strength and declining non-Communist cohesion,” the CIA concluded, the project “to install and sustain, covertly, a pro-U.S. government in Guatemala” must proceed “without delay.” There was also domestic pressure to act: in mid-October the chairman of the Senate Foreign Relations Committee, Republican Alexander Wiley, declared, “Communism has established a strong beachhead in Guatemala,” thus putting the Eisenhower administration on notice that inaction in Central America would not be acceptable. When Allen Dulles met with his top CIA planners in mid-November, he told them the coup “is a top priority operation for the whole agency and is the most important thing we are doing. I am under pressure by others to get on with this.” On December 9, 1953, he allocated $3 million to PB-SUCCESS and the overthrow of Arbenz.28
The CIA set up a large headquarters at the Opa Locka air base in Dade County, Florida, and Allen Dulles appointed a tough, hard-charging army colonel, Albert Haney, to run it. Haney had experience in Korea running underground guerrilla activities; now he led over 100 case officers in plotting the ouster of a democratically elected head of state. In February 1954 Haney’s team met with Castillo Armas and drafted a basic plan for channeling funds and weapons to his revolutionary movement. They had hopes that conservatives inside the Guatemalan Army, as well as elite landowners, would provide support and sympathy for a coup. Land reform had been controversial and indeed had antagonized the presidents of neighboring Honduras, El Salvador, and Nicaragua, who worried about the radical plans Arbenz had championed spilling over into their countries. Haney’s team worked hard to spread intensive propaganda about the “communist” land reform, even launching a radio program from Miami that broadcast anticommunist messages interspersed with music. Agents put intense pressure on army officers, subjecting them to anonymous phone calls and promoting rumors of what would happen to them if they continued to support the communists. Vivid posters describing the role of Moscow in distorting Guatemala appeared in the streets. The CIA had perfected the tools needed to generate an atmosphere of crisis.
But Arbenz himself may have caused the most grievous wound to his government. In April 1954 he secretly placed a $5 million order with the Czechoslovakian government for the purchase of thousands of tons of arms with which to supply his small armed forces. In mid-May those arms arrived at Puerto Barrios, a port on Guatemala’s Caribbean coast, carried by a Swedish freighter, the Alfhem. Wisner knew about the shipment of communist bloc arms, and although the CIA tried to intercept the ship, its arrival in Guatemala simply confirmed for the public the nefarious links between Arbenz and international communism. Neighboring Honduras now set aside any reservations it had and offered to support the American plot against Arbenz. U.S. Navy vessels moved into the Gulf of Honduras to impose a blockade, and shipments of tanks and planes now flowed into Honduras, to be deployed by Castillo Armas’s band of rebels.
On June 15 Castillo Armas began an invasion of the country from his bases in Honduras, but his “army” amounted to little more than 500 men on foot—hardly a threat to the capital city. Over the course of the following week, however, Castillo Armas relied upon U.S.-supplied aircraft to drop leaflets, strafe government buildings, and occasionally launch a bomb or two on locations near Guatemala City, creating the impression of an imminent invasion. The army, which had begun to reconsider its loyalty to Arbenz, finally turned on the president and pressured him to resign. On June 27, unable to command the loyalty of his troops, he stepped down, eventually making his way to safety in Mexico. Within days a junta of army officers, in conjunction with American intelligence agents, worked out a deal to bring Castillo Armas into power. It was another home run for the CIA, as Dulles and Wisner saw it. “A great victory has been won,” Wisner cabled to PB-SUCCESS headquarters in Florida.29
But was it such a great victory? Arbenz was no Soviet puppet but a leftist, reform-minded politician who had the bad fortune to face off against powerful foreign interests at the height of the cold war. His country posed no threat to the United States, or other Central American nations. His ouster brought down international condemnation on the coup, which was widely assumed to have been supported from Washington, and fomented anti-Americanism throughout Latin America. And Castillo Armas quickly turned into a pliant, if needy foot soldier for the United States, dependent on handouts of economic and military aid. Thereafter Guatemala endured three decades of repression, civil war, death squads, and terror. Not a legacy the Eisenhower team would wish to celebrate.
But those sorts of assessments would not become apparent until much later. In 1954 the CIA took enormous pride in its record: twice in 12 months it had engineered the overthrow of foreign governments that were seen as hostile to American interests and subject to communist pressure. Eisenhower, who had been informed of the events in Guatemala on a daily basis by the Dulles brothers, seemed fully to believe that Arbenz was little more than a Kremlin-trained operative who had to be squashed. In the days after the coup, he discussed in the NSC “the best means of publicizing the fact that the Arbenz regime had be
en directed from Moscow, as a means of counteracting the Communist propaganda line that the United States had intervened in the internal affairs of Guatemala.” Here was a curious inversion of reality: in Ike’s mind, the USSR had become the interfering party, while the allegation of a U.S.-sponsored coup was mere “propaganda.”30
IV
In the spring of 1954, in the afterglow of the Iran operation and on the eve of the Guatemala coup, the National Security Council issued a policy document that reinforced America’s newfound reliance on covert operations as a tool of statecraft in the cold war. Building upon the Truman-era commitment to using covert operations to combat the “vicious covert activities of the USSR,” NSC 5412 went even further. It called for a battery of covert operations designed to “exploit troublesome problems for International Communism, impair relations between the USSR and Communist China . . . discredit the prestige and ideology of International Communism . . . counter any threat of a party of individuals directly or indirectly responsive to Communist control to achieve dominant power in a free world country . . . reduce International Communist control over any areas of the free world,” and develop secret resistance networks to wage guerrilla operations in the event of war. NSC 5412 reveals the astonishing breadth and ambition of American covert operations. From coups to economic warfare, and sabotage, propaganda, and underground resistance, U.S. secret plans took aim at every aspect of communist power across the globe.31
And yet, despite the success of the covert operations in Iran and Guatemala, and despite the determination stated in NSC 5412 to continue to wage a hidden war against communism, Eisenhower was unhappy in mid-1954 with the state of his intelligence agency. Certainly he saw the value of covert operations and he approved NSC 5412 and its call for greater, bolder plans. But Eisenhower had bigger concerns. The “dime novel” capers of Kermit Roosevelt and Al Haney had inadvertently drawn attention away from a much bigger problem that the CIA was not adequately addressing: the need to provide the president with timely intelligence about the intentions of the Soviet Union. What kept Eisenhower awake at night was the Soviet threat, not the Guatemalan threat. The NSC had declared in a top-secret policy paper in February 1954 that with the advent of a Soviet H-bomb the previous August, the danger of the Soviet arsenal had dramatically increased. This new weapon has “placed a premium on . . . improvement of our intelligence regarding Soviet capabilities and intentions.” It was the CIA’s job to give the president this information, and so far it had failed.32
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