by Gerard Colby
It was perfect for the CIA’s operations in remote areas where landing strips—if they existed at all—were clearings chiseled out of the side of a mountain.
19
DISARMING DISARMAMENT
LAST CALL AT QUANTICO
On the night of Sunday, June 5, 1955, guards snapped repeatedly to attention as a long line of automobiles pulled into the Marine Corps School at Quantico, Virginia. Against the opposition of the State Department, Nelson Rockefeller had convened a secret conference to prepare recommendations for strategies for the Cold War.
It was a historic gathering. The top foreign policy analysts, propagandists, and arms experts of the United States closeted themselves for four days and nights with men at the core of the Rockefeller brain trust.
Decades later, many of the recommendations that came out of Quantico would still be classified, their influence on U.S. government policy persisting through administrations without any public airing of the scope and content of what had been discussed or drafted. With Nelson Rockefeller, the “secret government” had truly arrived in the United States.
One proposal that would eventually come to light was the “Open Skies” plan. It suggested that at the summit conference in Geneva in July 1955, Eisenhower should parry the Soviets’ call for a general disarmament and its unprecedented acceptance of inspectors at permanent stations on both sides of the Iron Curtain. If the Soviet Union would provide blueprints of all its military installations, allow U.S. teams to enter these bases and weapons production facilities, and, most important of all, permit U.S. military planes to penetrate Soviet airspace to photograph these installations, the United States would do likewise and restore the trade and cultural exchange that had been drastically curtailed since the end of World War II.
Nelson outlined the plan in the terse one-page military style to which Eisenhower was accustomed and then took it to the White House.
Eisenhower was interested. Both he and Nelson knew what others did not: The U-2, supported by the CIA’s new photographic center, made Soviet permission for aerial inspection unnecessary. Flying at an altitude of 70,000 feet, beyond the reach of any Soviet missile in 1955, the plane’s pictures revolutionized intelligence gathering.
The real value of Open Skies was its psychological warfare potential as propaganda to offset the Soviet’s “peace offensive” and to convince the world—especially the American people as the 1956 elections approached—of the Republican administration’s sincerity. The Soviets, moreover, could be expected to refuse to surrender their defense secrets and sovereignty over their airspace, giving Open Skies a double-fisted propaganda punch.
“Foster,” the president phoned Secretary of State John Foster Dulles, “here’s an idea.”1 But Dulles explained that the State Department had already seen the proposal and rejected it as a “public relations stunt”2 that could undermine the serious work of the Summit and its potential—and particularly the department’s own disarmament proposal that was being drafted by Harold Stassen. “We don’t want to make this meeting a propaganda battlefield.”3
Like Roosevelt and Truman before him, Eisenhower, when faced with a confrontation between Nelson and the State Department, usually deferred to the department. And he did this time, too. Nelson, true to his nature, persisted. Invited to a pre-Summit meeting between Eisenhower and John Foster Dulles two days later, Nelson hammered away at Dulles’s position, emphasizing that unless the president took the initiative, the Soviets’ “peace propaganda” would score big with the neutral nations of the Third World. “You may be certain that the Russians will attempt to make themselves important at this juncture in the Cold War,” Rockefeller argued.4
Dulles was furious. He had been warned that Nelson might try to pull something like this. His staff had objected to Nelson’s holding the Quantico seminar precisely for this reason. “The general attitude here is one of irritation,” the CIA’s Frank Wisner told C. D. Jackson, “at the idea that some smart outside one-shot kibitzers will be able to suck out of their thumbs something that the professionals who work 365 days a year won’t already have thought of, and probably discarded.”5
Finally, Dulles pulled rank, laying his job on the line. The president, he reminded Eisenhower, cannot have two secretaries of state, and statesmanship should not be reduced to propaganda shows.
Nelson pushed, but Eisenhower had had enough. “Damn it, Nelson,” he snapped, “I’ve already told you we don’t want to make this meeting a propaganda battlefield!”6 In the end, he came up with a compromise. Over the State Department’s objections, Nelson was permitted to fly to Paris on the condition that he would “stay out of sight” and wait for instructions from Geneva should he be needed.
As Nelson expected, the Soviet Union’s peace proposals at Geneva went further than even Eisenhower had anticipated, including the complete outlawing of the manufacture and use of all nuclear weapons. Eisenhower and Dulles tried to respond by reviewing the issues of the Cold War, but no one was interested. The issue now was peace in the nuclear age. On Tuesday, the second day of the conference, Dulles ran out of steam, and Eisenhower was only too glad to receive the coded wire from Nelson in Paris suggesting other options. The president sent back orders to Nelson and Harold Stassen, Eisenhower’s special assistant on disarmament and the drafter of the State Department’s proposals, to advance to Geneva, and come up with new statements for Eisenhower to use.
After many versions (“Stassen insisting on plugging his [disarmament] line, Nelson editing it out”), Eisenhower ended the debate by writing his own version, based on Nelson’s viewpoint. At the last moment, it was decided to keep the Open Skies proposal out of the text.7 “All agreed to keep this top secret,” Nelson said, “even from lower rank Americans.”8
On Thursday, July 21, Eisenhower rode under cloudy skies from his lakeside villa to the old League of Nations building for the Summit’s climactic session.
When it was his turn to speak, Eisenhower rose from the giant square conference table and began reading from a dry position paper. The Russians, British, and French listened politely. Some of them noticed for the first time a new face watching them from directly behind the president. A few of them recognized Nelson Rockefeller.
Then the dramatic moment arrived. Eisenhower was midway through his speech when he suddenly took off his glasses, summoned all his Kansas candor, and looked Soviet Premier Nikolai Bulganin squarely in the eye. Speaking as if extemporaneously, he proposed exchanging “a blueprint of our military establishments” and providing
within our countries facilities for aerial photography to the other country to convince the world that we are providing, as between ourselves, against the possibility of great surprise attack.…
I do not know how I could convince you of our sincerity in the matter and that we mean you no harm. I only wish that God would give me some means of convincing you of our sincerity and loyalty in making this proposal.… The time has come to end the Cold War. And I propose that we take practical steps to that end; that we begin an arrangement very quickly, as between ourselves—immediately.
At that very moment, lightning flashed, thunder clapped, and the hall’s lights flickered. “To this day,” chuckled U.S. interpreter Vernon Walters years later, “I am told the Russians are still trying to figure out how we did it.”9
One Soviet delegate was particularly furious. His official rank was only that of a political observer on Bulganin’s staff, but Walters, an intelligence officer with experience going back to Berle’s Rio Embassy and the 1948 Organization of American States (OAS) conference in Bogotá, had already sized him up as the real leader of the Soviet delegation. As Rockefeller accompanied Eisenhower out of the hall, the short, bald man abandoned Bulganin’s diplomatic niceties and personally confronted them.
“Khrushchev knew who I was,” Nelson remembered, “but he just looked at me and went on talking to the President.”10 Walters’s translation could barely keep up as the powerful secretary general of the C
ommunist Party of the Soviet Union accused the Eisenhower administration of trying to sabotage the Summit with grandstanding gestures that could never be accepted by the Soviet Union. The arguments flew back and forth. Eisenhower tried to assure Nikita Khrushchev of his sincerity and challenged the Soviets to accept open skies; Khrushchev, knowing that his party hardliners and the Soviet military would never allow its provisions, bitterly denounced the speech. Then he abruptly turned away and left. “We knew the Soviets wouldn’t accept it,” Eisenhower admitted. “We were sure of that. But we took a look and thought it was a good move.”11
GUNS AND BUTTER FOR THE THIRD WORLD
Back in Washington, Nelson’s victory had produced unforeseen problems. The Soviets did not publicly reject Open Skies. And Eisenhower’s speech raised false hopes among misguided Europeans and Americans alike that the “Spirit of Geneva” meant that military confrontation with the Soviets was less likely.
This expectation of lessened tensions disturbed Nelson. It was the threat of war that had forged into being not only NATO, but also the only major U.S. military pact in the Third World, the OAS in Latin America. War would also be the basic argument for setting up SEATO that September along Asia’s Pacific Rim. To meet the challenge of this outbreak of peace, Nelson got Eisenhower’s approval to reconvene the Special Group’s brain trust at Quantico.
The first time, the State Department had been worried. “He seems to be building up a big staff,” Dulles had complained. “He’s got them down at Quantico, and nobody knows what they’re doing.”12 Dulles and other Cabinet members had even more cause to worry about Quantico II. Although Nelson sold the second gathering to Eisenhower as an effort to “consider the psychological aspect of U.S. strategy” after Geneva, Nelson’s interest was now more economic in nature and grander in scale. He wanted a new “world economic policy” for the United States.
Nelson’s forty-one-page Quantico II report called for an $18 billion conventional arms buildup, coupled with a massive increase in foreign aid to help Third World governments finance the infrastructure needed for a huge infusion of American corporate investment. The latter included integrating nuclear power into overall power programs that rested mainly on coal and hydroelectric power. The report was mindful that “the American national conviction that ‘colonialism’ is bad under all circumstances … overlooks the fact that many peoples are incapable of self-government.”13
To prevent the Soviets’ publicly owned and subsidized socialist enterprises from competing “unfairly” against privately owned profit-seeking enterprises, the arms race would offer “the prospect of inducing strains in the Soviet economy.” There would be “the added virtue of offering the type of production competition [high technology, capital intensive] that is comparatively most costly for the USSR to match.”14
An arms race just might bankrupt the Soviet Union, or at least cripple its capacity to compete in world markets with Western private corporations. And an arms race was bound to curtail production of consumer goods, continuing consumer frustrations and fears that increased the strength of conservatives in the Soviet military; any plans by Khrushchev to dismantle Stalin’s garrison state and introduce democratic reforms would have to give way before the perceived threat of imminent nuclear war. The United States, on the other hand, could “afford to survive” through an arms race. To rally the nation behind its new arms race, the report called for a presidential initiative in “explaining to the people of the United States the gravity of the world situation.”15
Not everyone was impressed by Nelson or his Cold War intellectuals. And by the time his classified report was circulating among some 600 cleared government officials, the one man Nelson had most hoped to influence—the president—had been removed from action.
On September 24, the day before Quantico II convened, Dwight Eisenhower suffered a heart attack. Hospitalized until November 11, he was replaced at the helm titularly by Vice President Richard M. Nixon, but actually by Secretary of State Dulles. Suddenly, Nelson was confronted with the “sick president” syndrome that he had experienced with Roosevelt and had almost ended his career in government: a hostile vice president, a secretary of state who was jealous of his power, and a praetorian guard that considered him an outsider. With the loss of direct access to the president, Nelson was stripped of power and isolated.
Eisenhower was not in complete command even after his release from the hospital; he spent only four days in Washington before going to his Gettysburg farm to convalesce. Nelson next saw him at a National Security Council (NSC) meeting on November 21. It was not clear whether Eisenhower could run again in 1956, which left the field open. Lacking a bureaucratic base like the CIAA to enable him to remain a contender, Nelson tried to get appointed deputy secretary of the most powerful bureaucracy of all—the Defense Department. He did not get the job.
Nelson had to concede that his stint at the White House was turning out to be a failure, but he could claim success in one arena of the Cold War: Latin America. During Nelson’s tenure as presidential coordinator of the CIA’s covert operations in 1955, “Latin America began to emerge as an area of the Cold War,” the CIA’s Harry Rositzke wrote later. “The CIA became involved in a broad front of covert action: building news services and local outlets for distributing propaganda, supporting non-Communist student congresses, sponsoring or subsidizing anti-Communist publications, extending the activities of its intellectual front organizations into the youth, student and labor groups from Mexico to Brazil.”16
Nelson’s stint as the chief of psychological warfare coincided with a face-lift for the American business ethic for foreign appearances. The United States Information Agency, through a campaign called “People’s Capitalism,” was about to rechristen U.S. corporations as models of responsible behavior and democracy. People’s Capitalism was an attempt to foster the image of a capitalism no longer predatory or abusive, but matured into a responsible corporate citizen, democratically owned and controlled. This argument for democracy through stock ownership ignored the central point of American democracy—the inherent right of enfranchisement, the right not to have to pay for a vote—and breezily overlooked the reality that in a stockholders’ meeting in the United States the many can be outvoted by the few. People’s Capitalism had one redeeming value: propaganda. Americans, convinced that anyone could get rich through hard work and luck, had also accepted the arbitrary prerogative of wealth as a right, as long as corporations at least appeared to be trying to act in a socially responsible manner. Fostering such an image always had been at the core of the Rockefeller family ethic.
“People’s Capitalism” became the ideological soul of the CIA-funded People-to-People Program17 promoted by the American Municipal Association’s Committee on International Municipal Cooperation. The Washington-based committee sponsored “Sister City” projects between Chamber of Commerce types in the United States and abroad, including cities and towns in Amazon-basin countries, where prospects for American capital for development were often tied to the subject of oil.
OPENING DOORS FOR OIL WARS
Perhaps no one in Eisenhower’s NSC understood more intimately the political sensitivities surrounding oil than did Nelson Rockefeller. He was certainly more sensitive than most NSC members to Egyptian national pride. He also had both the background and high position in the intelligence community to be able to see how the frustration of Egyptian President Gamal Abdel Nasser over his country’s underdevelopment could affect Latin America through Egypt’s control over oil supplied to Europe and the United States. In 1955, the continued flow of Middle Eastern oil through the Suez Canal to Western Europe was far from certain. The Pentagon had long been concerned about the paucity of tapped oil reserves in Latin America.18
The Pentagon’s fretting dated back to 1944. The State-War-Navy Coordinating Committee, the wartime precursor to the National Security Council, had identified oil pools in the Amazon basin. These reserves had remained mostly untapped, precisely because
of the availability of Middle Eastern oil. But now Soviet penetration of British, French, and American control over Middle Eastern oil seemed a definite possibility, with Nasser’s arms accord with Czechoslovakia and the Soviet offer of financial and technical aid. Latin America’s oil suddenly took on new significance.
Brazil’s Amazon was out of bounds to American oil companies. With his suicide, President Vargas had achieved his most important political goal: The army had supported Petrobrás’s monopoly over oil exploration.19 Petrobrás’s strike in March 1955 near Manaus had occurred despite the earlier-stated “disinterest” in the Amazon by exploration consultants from Geophysical Service, Inc. (GSI), a subsidiary of Texas Instruments (TI).
Since 1953, Texas Instruments had owned the Intercontinental Rubber Company, the old rubber firm associated with the family of Nelson Rockefeller’s grandfather, Senator Nelson Aldrich, during the turn-of-the-century heyday of the Green Hell in the Belgian Congo and the Amazon. Whether the Brazilians were aware of Texas Instruments’ close ties to the Rockefellers,20 their rejection of GSI’s advice paid off. Moreover, the Brazilian army was enthusiastic about cashing in on Brazil’s 1938 treaty with Bolivia. That treaty provided that Brazil, in return for completing a railroad outlet for Bolivia’s rubber and cattle in the jungle hills and lowlands east of the Andes, would receive joint rights in the region’s Camirí district to develop oil. The railroad was completed in 1954, but neither the government in La Paz nor the one in Washington had any intention of allowing Petrobrás’s holdings to extend into Bolivia.
The year 1955 marked a sudden turn for the worse in Brazil’s relations with Bolivia. It also marked a concurrent boost in fortunes for American oil companies that were seeking some way of dealing with the new government that had come to power with the Indian Revolution of 1952. After oil was struck east of the Andes at Camirí in early 1954, Bolivian President Victor Paz Estenssoro’s eagerness to see Petrobrás live up to its treaty obligations rapidly disintegrated. By the end of Nelson’s White House tenure in December 1955, Paz Estenssoro announced that he was opening the region and almost all national territory—to foreign oil concessions. Petrobrás suddenly found itself competing with Standard Oil, Texaco, and Gulf, all of which now had Paz Estenssoro’s favor.21