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  • Writer's pictureLuis Rueda

The History of CIA Covert Action - Guatemala - 1954

(Note: This is not a detailed history of the 1954 Guatemala Coup. That would require too much space for a blog post. In addition, there are many good books available that provide the details and ins and outs of the coup. The purpose of this—and other blog posts dealing with CIA covert action—is to look at how covert action works, the techniques most often used, and its pros and cons. We want to look at how covert action fits into U.S. national security policy and lessons learned.)

Located in Central America, Guatemala was a Spanish colony until its independence in 1821. Through most of its existence, it struggled with instability and internal strife. Until 1944 it was ruled by a series of repressive dictators supported by the United Fruit Company (UFC) and the United States government. We need to understand some of the background prior to 1944 so as to better understand the events of 1954.

During the late 19th century and the first half of the 20th century, a perfect storm of economic interests and brutal dictatorships served to severely change the economy of Guatemala. Authoritarian Guatemalan governments passed laws that threw farmers off their land, basically dispossessing them without compensation. Then allowed coffee planters and foreign companies, such as the UFC, to purchase that land at reduced prices. In addition, the UFC was allowed to operate in Guatemala tax-free. In fact, many of the landowners and foreign companies were allowed to operate freely, almost existing outside the law. These companies could force landless peasants to work for them and even execute those peasants if they wanted. This set the stage for instability and revolution.

In 1944 a popular uprising overthrew the dictatorship of Jorge Ubico. There followed 10 years of democratic, free elections, and slow reform, which included a minimum wage and near-universal suffrage. The 1950 elections resulted in the legitimate election of Jacobo Arbenz, a former military officer who had served in the previous administration. Here begins the problems. Arbenz legalized the Guatemalan Communist Party (PGT), previously banned, and included some PGT members in the drafting of policies. However, the policies were pretty much moderate capitalism. The real problem came about with the government's land reform policy.

Jacobo Arbenz

This new law declared that uncultivated land above a certain acreage would be expropriated and given to the landless peasants, those dispossessed by previous governments. In addition, the landowners of the dispossed land would be compensated at the value they declared in their taxes. This resulted in 500,000 Guatemalans being given land.

Now landowners had been lying about the value of their land for years in order to pay lower taxes when they had to pay taxes. So they were angered that they were losing money on this new deal.. Companies like UFC, who remember were not paying any taxes, were worried about losing their large landholdings, the largest in Guatemala. UFC's earnings in Guatemala were twice that of the Guatemalan government, so they exerted considerable power in the country. UFC was also upset that the Guatemalan government passed a law allowing workers to strike if companies were in violation of new labor laws. I am simplifying this because there were a lot of details here, but you can look them up if you are interested.

The UFC saw itself as being specifically targeted by the new laws, and they likely were. UFC was viewed by many Guatemalans as a predatory company that through nefarious means had obtained unprecedented power and influence in Guatemala, but provided little benefits to Guatemala and its people. UFC began a concerted lobbying campaign in Washington, DC against the Arbenz government, portraying UFC as the victim of a communist government. UFC worked congress, obtaining the support of several senators and representatives. However, they found a very receptive audience when the Eisenhower administration took office. They were fortunate that the positions of Secretary of State and Director of the CIA were the Dulles brothers: John Foster Dulles and Allen Dulles. Both had done legal work for UFC when they worked for a New York law firm in the 1920s. Some have even suggested that the Dulles brothers had financial interests in UFC. Whatever the case, the brothers lent a receptive ear. In addition to these two, Under Secretary of State Walter Bedell Smith, Eisenhower's former chief of staff and the former Director of the CIA ended up as director of UFC later on, indicating some type of relationship with the company. UFC clearly had reach into the U.S. government and the White House. Even Eisenhower's personal assistant, Ann Whitman, was married to the UFC director of public relations.

Allen and John Foster Dulles

There were a lot of machinations and back and forth that I won't go into, but in the end, the Eisenhower Administration decided that Arbenz had to go and ordered the CIA to mount a covert action program to overthrow the Guatemalan government. The operation was named PBSUCCESS. The decision to have the CIA mount a coup was driven, in part, by the success they had had in Iran. If you remember from history or my previous post, the CIA had launched a military-led coup against the government of Iran. There was a degree of hubris building up with the government and the CIA that they could accomplish anything.

In the meantime, the U.S. Government began a concerted pressure campaign against Guatemala: branding it a communist threat, placing an embargo and a naval blockade on the country, and even starting to block all weapons purchases by that country. In desperation, the Guatemalans looked to Canada, Germany, and even Rhodesia for arms. When the U.S. blocked all these efforts, Guatemala turned to Czechoslovakia, a Russian client state, to purchase weapons. This further strengthened the U.S. belief that Arbenz was a communist, and was the last straw for the Eisenhower administration. The CIA was instructed to launch a coup effort against Arbenz.

We will pause for a moment here to review what has been a prevalent characteristic of U.S. covert action efforts during this time period and for the coming years. U.S. fear and paranoia about communism affected almost all foreign policy decisions. And while the Soviet Union posed a strategic threat to the United States, America's fear of communism caused it to make seriously bad assumptions. Democratically elected Mossadegh in Iran, and now Arbenz, were deemed to be communist when in truth they were not. Both were nationalists, working to improve their nations' economic situation, but these actions were viewed by the U.S. as communist policies. There were a few communists with access to Arbenz and his policymaking, but he was not a communist and the influence of these communists was very limited. Nonetheless, we branded Arbenz a communist and acted accordingly.

The second characteristic of policy and covert action in those days was the conflation of private economic interests with U.S. national security. The idea of UFC losing unused land, for which they would be compensated, as critical to U.S. national security is patently false. UFC was not being nationalized, nor was it being punished in any way. The loss of the land would not have damaged U.S. national security. Now, back to our story.

To start the coup effort the CIA identified an exiled Guatemalan army officer, Carlos Castillo Armas, as the potential coup leader. Armas was in exile after a previous coup attempt failed. The CIA armed, funded, and trained a small group of Castillo Armas supporters, numbering 480 men, using Nicaragua and Honduras as bases of operations. 480 men would not be enough to invade Guatemala and the CIA knew this. The strategy was to be a massive bluff and would rely principally on psychological operations.

The CIA also understood that keeping the coup activity secret would be extremely difficult. With 480 men directly involved in the operation, as well as the governments and military of both Nicaragua and Honduras, word of the training and equipping of the invasion force would leak out. The CIA used this to their advantage, creating the image of a much larger and more capable force, as well as creating fear and suspense at the pending invasion. They hoped that this would create enough pressure to cause an uprising, with either the people or the army, to overthrow the government in order to avoid an invasion.

The CIA escalated the pressure by developing contacts in the Guatemalan religious community, obtaining the support of various clergy to preach anti-communist and anti-government sermons. The pressure was also placed on generals, intimating a direct U.S. military intervention in Guatemala if Arbenz was not removed. The CIA also established the radio station “Voice of Liberation.” This radio station, located outside Guatemala, played a key part in the coup. It broadcast anti-communist propaganda, attacks against the government, and spread the news of the growing "success" of the invading army. In reality, the military portion of the coup was an abysmal failure.

The 480 man invasion force was divided into four columns, each entering Guatemala from a different location on 18 June 1954. All the columns were defeated, generally by smaller government forces. Airplanes from the rebel forces bombed several locations including the capital. They did not cause significant damage and many were shot down by government ground fire. They did, however, generate panic among the populace, making it appear that rebel forces were stronger than they actually were.

As the military coup floundered and failed, the Guatemalan army wavered. They assumed that U.S. backing of the rebels guaranteed their success. If they did not win, then the U.S. would invade Guatemala, assuring a rebel victory. The psychological pressure had done its job. The Guatemalan army would not fight and suggested to Arbenz that he resign for the good of the country. After exploring various options, including arming his supporters, which the army refused, Arbenz resigned on 27 June 1954 and went into exile. Castillo Armas became president.

The victorious coup plotters. Castillo Armas sits next to the driver.

Arbenz moved from country to country: France, Switzerland, Mexico, Czechoslovakia, Russia, and Uruguay. He could never find rest because the CIA and the U.S. kept after him. He remained popular with the left in Latin America and the U.S. believed it could not allow him to find a place to build a political base. He eventually drifted to alcoholism and died never having returned to Guatemala or regained political power. Castillo Armas ruled Guatemala with a brutal iron fist until he was assassinated by leftist sympathizers in 1957. The ensuing military dictatorships that followed the coup did what most Latin American military dictatorships do, they engaged in corruption, torture, and killing. This, in turn, led to the rise of leftist and communist guerilla groups, some led by former army officers, moved to military action by the brutality of the various governments. Guatemala was plunged into a savage 30-year civil war.

Lessons Learned: I would argue that this covert action was more successful than the 1953 Iran coup. Iran played out as more amateurish, flopping early on but saved by quick action by Iranian coup plotters. The covert action in Guatemala seems to have been managed more professionally. CIA planners understood the problems with the military aspects of the coup and relied more on psychological operations, which proved highly successful. Messaging has a dramatic impact on the population and the military. The CIA understood the target audience and played them masterfully. A message does not have to be sophisticated or logical, it just has to be able to influence the target audience in the direction you want. We see this nowadays in politics.

The effort against Arbenz was also a coordinated effort by the U.S. government as a whole. Not just the CIA, but the State Department, DOD, Treasury, everyone moved toward one goal. This is critically important when conducting covert action. I have seen covert action programs undercut by an overt policy that appears to have an opposing goal. Covert action does not operate in a vacuum and must be integrated into an overall policy.

As I noted above, the U.S. proved too easily swayed by anti-communism. We will see throughout the Cold War that fear of communism could make the U.S. take actions that ended up being against their own national security interests. We made stupid decisions and assumed faulty premises. We also fell short of what I call "the day after" piece. That is, what do we do the day after we accomplish our goal? Too often we walk away and leave the country in chaos, allowing it to metastasize into an even larger problem that we have to return to fix. Guatemala is a case in point. U.S. support for brutal, repressive dictators created the rise of leftist and communist insurgencies that threatened our interests in the region. Prior to our interventions, these threats did not exist or were minor. We made them bigger and more dangerous.

We also started to exhibit that characteristic that still plagues us to this day. We usually seem to find the worst people to lead governments we install. Good leaders might be hard to find, but we don't seem to even make the effort.

Rather than promote democracy, free enterprise, and justice we promoted dictatorships, and corrupt economic practices that favor small groups while disadvantaging the majority of the population. That was the road to communist insurgency. The logical action should have been to engage newly established democratic governments and steer them toward a more beneficial political and economic system. We made enemies where we did not need them and generated hatred towards America.

As for the CIA, its reputation in Latin America grew to mythic proportions. The belief was established that the CIA knew everything, controlled everything, and influenced events throughout the continent. Governments took power with our permission and fell when the CIA decided these governments were no longer useful. There was a joke told throughout Latin America that conveyed these beliefs: "Do you know why there are no coups in the United States? Because there is no American Embassy in the United States."

In the next installment, we will see how this power and hubris led us to one of the worst blunders in our history, The Bay of Pigs.

President Eisenhower and Secretary of State Dulles

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