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The CIA and Guatemala
Digital History ID 1119


Date:1994

Annotation: In 1954, a CIA-backed coup overthrew the elected government of Guatemala, which had nationalized property owned by the United Fruit Company. President Eisenhower's Secretary of State, John Foster Dulles, accused the Guatemalan president of installing "a communist-type reign of terror" and plotting to spread Communism throughout the region. As proof that the Guatemala had ties to the Soviet Union, CIA operatives planted Soviet weapons in Guatemala and CIA pilots bombed airfields in Honduras.

These documents, including an instructional guide on assassination found among the training files of the CIA's covert "Operation PBSUCCESS," were among several hundred records released by the Agency on May 23, 1997. PBSUCCESS, authorized by President Eisenhower in August 1953, carried a $2.7 million budget for "pychological warfare and political action" and "subversion," among the other components of a small paramilitary war.


Document: Chapter 1. America's Backyard

The CIA's operation to overthrow the Government of Guatemala in 1954 marked an early zenith in the Agency's long record of covert action. Following closely on the successful operations that installed the Shah as ruler of Iran the Guatemala operation, known as PBSUCCESS, was both more ambitious and more thoroughly successful than either precedent. Rather than helping a prominent contender gain power with a few inducements, PBSUCCESS used an intensive paramilitary and psychological campaign to replace a popular, elected government with a political nonentity. In method, scale, and conception it had no antecedent, and its triumph confirmed the belief of many in the Eisenhower administration that covert operations offered a safe, inexpensive substitute for armed force in resisting Communist inroads in the Third World. This and other "lessons" of PBSUCCESS lulled Agency and administration officials into a complacency that proved fatal at the Bay of Pigs seven years later.

[Page 8]

United Fruit executives regarded any trespass on the prerogatives they enjoyed under Ubico as an assault on free enterprise. The company continued to report only a fraction of the value of its land and exports for tax purposes and initially found Arevalo cooperative and respectful. But United Fruit soon grew concerned about the new government's sympathy for labor. In 1947, Arevalo passed a labor code giving industrial workers the right to organize and classifying estates employing 500 or more as industries. The law affected many of the larger fincas as well as state farms, but United Fruit contended-and the Embassy agreed-that the law targeted the company in a discriminatory manner. Workers at Bananera and Tiquisate struck, demanding higher wages and better treatment. The company had never asked for or needed official support from the United States before, but now it sought to enlist the Embassy and State Department to do its negotiating.

[Page 10]

Even without help, United Fruit could put Guatemala's feet to the fire. Berneys laid down a PR barrage that sent correspondents from Time, Newsweek, the New York Times, and Chicago Tribune to report on Communist activities in Guatemala. Company officials encouraged Castillo Armas with money and arms, and the rebel leader began seeking support from Central American leaders and the United States.

[Page 11]

The Administration's concern about the Arbenz regime had increased in mid-1951, and there is evidence that the Truman administration encouraged the company to take a hard line. United Fruit's vast holdings and monopolies on communications and transit in Central America attracted the attention of lawyers in the Justice Department's antitrust division as early as 1919. In May 1951, they were preparing for court action to force United Fruit to divest itself of railroads and utilities in Guatemala when the State Department intervened. In a National Security Council session, Department representatives argued that a legal attack on United Fruit's Guatemalan holdings would have "serious foreign policy implications," weakening the company at a time when the United States needed it. The action was suspended until the situation in Guatemala had improved. It is often asserted that the United States acted at the company's behest in Guatemala, but this incident suggests the opposite may have been true: the administration wanted to use United Fruit to contain Communism in the hemisphere.

Chapter 2. Reversing the Trend [Page 26]

THE PLAN The planners decided to employ simultaneously all the tactics that had proved useful in previous covert operations. PBSUCCESS would combine psychological, economic, diplomatic, and paramilitary actions. Operations in Europe, [xxxxxx] and Iran had demonstrated the potency of propaganda-"psychological warfare"-aimed at discrediting an enemy and building support for allies. Like many Americans, US Officials placed tremendous faith in the new science of advertising. Touted as the answer to underconsumption, economic recession, and social ills, advertising, many thought, could be used to cure Communism as well. In 1951, the Truman Administration tripled the budget for propaganda and appointed a Psychological Strategy Board to coordinate activities. The CIA required "psywar" training for new agents, who studied Paul Linebarger's text, Psychological Warfare, and grifter novels like The Big Con for disinformation tactics. PBSUCCESS's designers planned to supplement overt diplomatic initiatives-such as an OAS conference convened to discredit Guatemala-with "black operations using contacts within the press, radio, church, army, and other organized elements susceptible to rumor, pamphleteering, poster campaigns, and other subversive action." They were particularly impressed with the potential for radio propaganda, which had turned the tide at a critical moment in the Iran operation.

[PARAGRAPH]

[xxxx] Tofte, and [xxxx] considered Guatemala's economy vulnerable to economic pressure, and they planned to target oil supplies, shipping, and coffee exports. An "already cleared group of top-ranking American businessmen in New York City" would be assigned to put covert economic pressure on Guatemala by creating shortages of vital imports and cutting export earnings. The Program would be supplemented by overt multilateral action, possibly by the OAS, against Guatemalan coffee exports. The Planners believed economic pressures could be used surgically to "damage the Arbenz government and its supporters without seriously affecting anti-Communist elements."

[Page 39]

The January revelations revealed how much the "plausible deniability" of PBSUCCESS relied on the uncritical acceptance by the American press of the assumptions behind United States policy. Newspaper and broadcast media, for example, accepted the official view of the Communist nature of the Guatemalan regime. In the spring of 1954, NBC News aired a television documentary, "Red Rule in Guatemala," revealing the treat the Arbenz regime posed to the Panama Canal. Articles in Reader's Digest, the Chicago Tribute, and the Saturday Evening Post drew a frightening picture of the danger in America's backyard. Less conservative papers like New York Times depicted the growing menace in only slightly less alarming terms. The Eisenhower administration's Guatemala policy did not get a free ride in press or in Congress. In early 1954, a number of editorials attacked the President's failure to act against Arbenz, citing the continued presence of US military advisers as evidence of official complacency. Walter Winchell broadcast stories of Guatemalan spies infiltrating other Latin American countries and urged the CIA to "get acquainted with these people." This line of criticism led reporters to hunt for signs of inertia, not for a secret conspiracy. When Arbenz revealed the plot, American newspapers dismissed it as a Communist ploy, another provocation to which the administration responded far too passively."

[Page 45]

[xxxxx] could see few details of the future regime clearly, but one feature was obvious: it would need American money. "Shortly after the Communists were defeated in Iran, the Iranian Government received generous assistance," he recalled. "Undoubtedly, the disappearance of the Communist regime from Guatemala will leave behind a certain economic and financial chaos which must be rectified by American aid." The new regime should build its reputation by industrializing Guatemala and raising its standard of living. The World Bank had devised a development program that should be pursued, but not in the tightfisted way of the past. "there is increasing recognition in American and other banking circles that the economic development of countries such as Guatemala cannot be undertaken and financed under strictly economic criteria," he explained. "We realize that there must be necessarily be certain wastage of funds because of local political conditions. We are prepared to underwrite this wastage" But before PBSUCCESS could usher in the new dependent undemocratic regime, it would have to mobilize Guatemalan activists, strengthen Castillo Armas, and coax the Army to commit treason.

[Page 48]

Agency propaganda operations succeeded in making Guatemala into the type of repressive regime the United States liked to portray it as. By late April, freedoms of speech and assembly had all but been revoked by official decrees and unofficial goon squads, which intimidated independent newspapers and radio stations into silence. Radio Universal, the only openly anti-Communist radio station, closed after its offices were raided by goons and its owner placed under arrest. Opposition elements remained active owing largely to the failure of Guatemalan police to make systematic arrests. Guatemala Station reported that the government's behavior demonstrated a "desire to crush opposition activity together with what appeared to be a lack of knowledge as to how to proceed most effectively." In the ensuing weeks, the police would cast scruples aside and move decisively to suppress the remnants of the opposition.

Chapter 3. Sufficient means [Page 55]

PBSUCCESS was ready by the beginning of May to place maximum pressure on the Arbenz regime. [xxxxxxx] had a variety of instruments at his disposal: propaganda, sabotage, aircraft, an army of insurrectionists, and the implicit threat of US military power. He used all of them to intensify the psychological distress of Arbenz and his officials. Even the paramilitary program-Castillo Armas and his liberacionistas-served a psychological rather than military function. As an Agency memo prepared for Eisenhower explained, the operation relied "on psychological impact rather than actually military strength, although it is upon the ability of Castillo Armas effort to create and maintain the impression of very substantial military strength, that the success of this particular effort primarily depends." Dealing in the insubstantial stuff of impressions and degrees of intimidation, [xxxxx] could not always measure progress, and it was difficult for even those close to PBSUCCESS to know what was happening, whether they were succeeding or failing, and why.

[Page 56]

So began an operation [xxxxxx] later called the "finest example PR/Radio effort and effectiveness on the books." The voices heard in Guatemala originated not in the jungle, or even in Honduras, but in a Miama [xxxxxxx] where a team of four Guatemalan men and two women mixed announcements and editorials with canned music. The broadcasts reminded soldiers of their duty to protect the country from foreign ideologies, and warned women to keep their husbands away from Communist party meetings an labor unions, and threatened government officials with reprisals. Couriers carried the tapes via Pan American Airways to [xxxxxxxx] where they were beamed into Guatemala from a mobile transmitter. When the traffic in tapes aroused the suspicions of Panamanian customs officials, the announcers moved to [xxxxx] and began broadcasting live from a dairy farm [xxxxxxxxxxxxxxxxxxxxxxx] a site known as SHERWOOD. At about the same time, the SHERWOOD operation improved its reception in Guatemala by boosting its signal strength. By mid-May the rebel broadcasts were heard loud and clear in Guatemala City, and SHERWOOD announcers were responding quickly to developments in the enemy capital.

To direct the SHERWOOD operation, Tracy Barnes selected a clever and enterprising contract employee, David Atlee Phillips, a onetime actor and newspaper editor in Chile.

[Page 59]

The arms purchase handed PBSUCCESS a propaganda bonanza. On 17 May, the State Department declared that the shipment revealed Guatemala's complicity in a Soviet plan for Communist conquest in the Americas. John Foster Dulles exaggerated the size of the cargo, hinting that it would enable Guatemala to triple the size of its Army and overwhelm neighboring states. The press and Congress responded on cue. "The threat of Communist imperialism is no longer academic," proclaimed the Washington Post, "it has arrived." The New York Times warned that Communist arms would soon make their way along "secret jungle paths" to guerrilla armies throughout the Hemisphere. "If Paul Revere were living today," Representative Paul Lantaff imagined, "he would view the landing of Red arms in Guatemala as a signal to ride." House Speaker John McCormack spluttered that "this cargo of arms is like an atom bomb planted in the rear of our backyard." These fulminations intensified the fears of many Guatemalans that the incident would provide convenient pretext for US intervention.

[Page 71]

the Agency, meanwhile, took steps to ensure that coverage in the American press had a favorable slant. Peurifoy met with American reporters in Guatemala City to discuss "the type of stories they were writing." At his suggestion, "all agreed to drop words such as 'invasion.'" The French and British consuls agreed to have a word with their correspondents. Agency officials had earlier managed to have Sydney Gruson, the New York Times correspondent, reexpelled from Guatemala.

[Page 90]

Opposition to the regime grew more vocal as the second anniversary of the liberation approached. On 1 May 1956, workers booed government speakers off the platform at a labor rally and cheered former Arbencista officials. In early June, embassy officials reported that the Guatemalan Communist Party was "well on its way toward recovery," with underground cells assuming effective leadership of the opposition. On 25 June, government agents fired into a crowd of student protesters marching on the presidential palace, killing six and wounding scores more. Castillo Armas declared a "state of siege" and suspended all civil liberties. The US Ambassador stressed to the president "the importance of publicizing, with supporting evidence, the events as part of a Communist plot." The United States Information Agency (USIA) agreed to help. Holland met with Guatemalan officials and "suggested that in dealing with demonstrators tear gas was effective and infinitely preferable to bullets."

[PARAGRAPH]

In the early 1960s, guerilla groups began operating in the eastern part of the country, and in 1966 the United States responded by sending military advisors and weapons, escalating a cycle of violence and reprisals that by the end of the decade claimed the lives of a US Ambassador, two US military attaches, and as many as 10,000 peasants. In 1974, the Army stole another election, persuading another generation of young Guatemalans to seek change through intrigues and violence. Increasingly, Indians and Catholic Church-which had formally remained aloof from politics-sided with the left, isolating the Army on the far right.

[Page 92]

United Fruit continued to decline during the 1960s, and in 1972 sold the last of its Guatemalan land to the Del Monte corporation. A few years later, the company merged with Morrell Meats to form United Brands, but the merged failed to stop the slide. In 1975, after a year in which the company lost $43.6 million and came under Federal investigation for paying a $2.5 million bribe to the Government of Honduras, United Brands' president, Eli Black, smashed out the window of his corner office in the Pan Am building and jumped to his death. Two years later, two New York real estate developers bought the company and managed to turn a profit. In 1984, United Brands was purchased by a Cincinnati-based insurance holding company, American Financial Corporation, which owns it today. Thanks to Americans' changing diets, banana importing has once again become profitable, and United's Chiquita brand has recaptured a majority of the market. The company's Tropical Radio division (which once employed the Salama conspirators) ventured into the cellular telephone business in the earlu 1980s and now dominates the mobile phone business in 20 Latin American cities.

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Amid the push for increased government accountability in the 1970s, leaks by former Agency employees continued to outnumber official disclosers. The Pike and Church committees, which investigated CIA activities in the 1970s, refrained-at least in public-from commenting on the Guatemala operation, but ex-CIA officers continued to fill in the details. In early 1972, Richard Bissell told John Chancellor on national television that "the whole policy-making machinery of the executive brand of the government was involved," with CIA taking a leading role. Soon afterward, an Associated Press reporter, Lewish Gulick, decided to test a new Executive order on declassification (Executive Order 11652) by requesting documents on PBSUCCESS. His request, on 6 July 1972, was the first declassification inquiry received under the new order, and since it came from a prominent media figure, Agency officials knew it could not be dismissed lightly. Nonetheless, after reviewing the documents, DCI Richard Helms denied the request in full. David Atlee Phillips, who was then the chief of the Western Hemisphere Division in the Directorate of Operations, argued that exposing the Guatemala materials would "only stir more Hemispheric controversy about CIA when our plate overflows already in the water of [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. Gulick appealed, but the Interagency Classification Review Committee, chaired by John Eisenhower, son of the former president, back up the Agency.

Former Agency officials, meanwhile, continued to tell their stories. Publishers found a popular genre in CIA memoirs. In Undercover, Published in 1974, E Howard Hunt disclosed his role in the psychological and paramilitary aspects of the operation. Four years later, Phillips described the SHERWOOD operations, a part of PBSUCCESS that had not previously received press attention, in an account copied almost verbatim from a debriefing report that is still classified. Many more officials told their stories to Richard Harris Smith, a former Agency official who was working on a biography of Allen Dulles. Smith missed his publisher's deadline, and in 1980 he showed his uncompleted manuscript to two Newsweek reporters, Stephen Schlesinger and Stephen Kinzer, who were working on a book on Guatemala.

Source: Nicholas Cullather, Operation PBSUCCESS: The United States and Guatemala, 1952-1954 (Washington, D.C.: CIA, 1994)

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