Fifties (61 page)

Guatemala, the next CIA target, was a small, very poor Central American country that the administration’s top officials, including the President himself, had already decided had gone Communist. Tensions between the United States and Guatemala had been on the rise since the late forties, when a harsh and brutal dictatorship under Jorge Ubico Castaneda had been overthrown and the Guatemalan government had begun to experiment with democracy. An inevitable byproduct of the Guatemalan social revolution was a new sense of nationalism, whose economic component was aimed at the United Fruit Company. Some called United Fruit
La Frutera,
others called it
el pulpo
—the octopus. In a country that was poor and weak, United Fruit was rich and strong—the largest employer in the entire country.

Allen Dulles was enthusiastic from the start about a coup against the troublesome Arbenz. Both Dulles brothers, and Beetle Smith as well, had close ties to United Fruit, and the top United Fruit lobbyist, Tommy (“Tommy the Cork”) Corcoran, was a prominent New Dealer and Washington insider. Smith himself, on occasion, suggested that when he finished his government service he might make an excellent president of the fruit company, a suggestion Corcoran passed on enthusiastically to his clients. “He’s had a great background with his CIA associations,” Corcoran said, thinking that the people at United Fruit would understand immediately the value of having so important a connection. But United Fruit wondered if Smith knew enough about bananas. “For Chrissakes, your problem is not bananas,” Corcoran told the Fruit people. “But you’ve got to handle your political problem.” Though the United Fruit people did not give Smith the presidency of their company, they did clear a place for him on the board when he left the State Department in 1955. “The last thing I did for the Fruit Company,” Corcoran later said, “was to get Beetle to go on the board.”

From the start, Eisenhower was on board for a CIA-sponsored coup in Guatemala. More and more he saw Communism as a monolithic force that had to be combatted with extralegal means. This hard-line side of Ike was rarely revealed to the public. Genial, fair-minded, even-tempered, he never seemed a Cold War enthusiast or a jingoist; rather, he was the man who went before the world and
called for an “Open Skies” approach to end the arms race. He was not unaware that poverty and nationalism were powerful forces in the third world, and he understood, especially in the later part of his administration, that the arms race was not only dangerous but that it needlessly used up billions of dollars that might better be spent among the world’s poorer nations. Yet privately and in small groups, he seemed to subscribe to the prevailing simplistic view of the world as either part of the Communist or part of the free world.

But in this case Eisenhower was convinced that Guatemala had moved too far left and represented a potential bridgehead for Communism in the continent. He sent his brother Milton, more liberal than he, to the region and Milton seemed to concur. What Ike heard from both Dulles brothers and Beetle Smith was that Guatemala had irredeemably broken with the policy of the United States. The proof of it, clearly, was in Arbenz’s land reform decree that allowed for expropriation of United Fruit property. The Washington government consistently hardened its line and came to the conclusion that Arbenz was beyond saving and had to go, that his government was in the hands of Communists.

In one of the early planning sessions, Eisenhower asked Allen Dulles what the chances of success in Guatemala were. Better than 40 percent, Dulles answered, but less than even. That was good enough as far as Eisenhower was concerned, and he told Dulles to go forward. As in the past, he reserved the right to cancel the operation if at the last minute it did not feel right to him.

In August 1953 the CIA went ahead with training several hundred Guatemalan exiles and mercenaries at a camp in Opa-Locka, Florida, and in Honduras, while putting together a small air force for this “national liberation force.” By mid-June 1954, all the pieces of the coup were in place: the airplanes readied, a radio station set to broadcast on behalf of the rebels, and the liberator of Guatemala chosen—a military man named Carlos Enrique Castillo Armas, who had “that good Indian look about him ... which was great for the people,” Howard Hunt noted. All that was needed was Eisenhower’s final approval, which he gave at a meeting on June 16. Foster Dulles, Allen Dulles, Charlie Wilson, and other top officials were at the meeting. Allen Dulles went over the plan; Eisenhower listened carefully and finally asked, “Are you sure this is going to succeed?” All of his advisers seemed confident. “I want you all to be damn good and sure you succeed,” he continued. “I’m prepared to take any steps that are necessary to see that it succeeds. When you commit the flag, you commit to win.” Two days later Operation Success began.

Guatemala was one of the poorest places in the Western Hemisphere. No wonder American policymakers feared that it was a fertile place for Communism to take hold. A small oligarchy owned most of the land, wages were desperately low (in recent months there had been strikes by workers on United Fruit’s banana plantations seeking wages of $1.50 a day), and United Fruit, with the help of bribes and payoffs, controlled the political process of the country. It also controlled, either directly or indirectly, as Stephen Schlesinger and Stephen Kinzer note in their book
Bitter Fruit,
some 40,000 jobs in Guatemala, and its investment there was valued at $60 million. Almost all of Guatemala’s railroad tracks belonged to a subsidiary of United Fruit; and in addition, United Fruit owned the telephone and telegraph facilities and ran the most important Atlantic port. Virtually anything that was modern belonged to La Frutera; what was old and broken-down belonged to the nation.

Of La Frutera’s vast acreage of land, a relatively small percentage was kept under cultivation, in order not to flood the market with bananas and bring the price down. By 1950 the company reported an annual profit of $65 million, a figure that represented twice the total revenue of the Guatemalan government. No one important in the Guatemalan government existed without the approval of United Fruit. As such the country was traditionally run by anti-Communist dictators, plucked out of the military, who liked to use their police powers to suppress any domestic social unrest. It was not by chance that the names of Central American and Caribbean dictators came to read like a rogue’s list of the region’s most despised despots: Somoza, Trujillo, Batista, Ubico of Guatemala, and Galvez of Honduras. All of them were backed by the American government and its partner in the area, United Fruit.

The Ubico regime had come to power in Guatemala in 1930. It was a cruel, almost sadistic government, particularly brutal in the way it treated the Indian peasantry. Paranoid and ignorant, Ubico seemed to glory in the fear his name inspired and delighted in the popular image of himself as a “wild and dangerous beast.” Once when a minor official named Miguel Ydigoras Fuentes, a rather conservative man, suggested that Guatemala’s truck drivers, who were often on the road for three days at a time, receive some traveling expenses, Ubico screamed at him, “So! You too are a Communist!” On another occasion he accused Ydigoras of reading Communist literature: When the latter protested that he had been reading a papal
encyclical and showed it to Ubico, Ubico skimmed it and said, “Then it’s true! There
was
a Communist Pope!”

When conservative American political advisers suggested to Sam Zemurray, United Fruit’s head (Sam the Banana Man was the nickname he had gotten as a poor boy working the New Orleans port when he had managed to corner the banana market), that the company’s repressive policies put it on some sort of political collision course with its poorest workers, he waved them aside. Political revolution was no problem, he liked to say; the peasants were too ignorant.

In 1944 the country’s fledgling middle class had revolted and brought back from exile the popular Juan Jose Arevalo Bermejo, a schoolteacher and writer who had been living in self-imposed exile for almost a decade because of his open opposition to Ubico. He was a true democrat, with a passionate belief that economic progress came through the political participation of ordinary people; his heroes were Bolivar, Lincoln, and Franklin Roosevelt.

Arevalo was, as Richard Immerman, the historian, noted, almost too idealistic, a kind of latter-day Don Quixote, yet “his idealism coincided with the revolutionary fervor so prevalent in his country.” If his orientation was essentially liberal, the results of his administration were somewhat mixed. There was so far to go: 70 percent of the country (and 90 percent of the Indians) was illiterate when he took office. Yet every move he had made on behalf of ending ignorance and injustice was viewed with growing uneasiness by powerful interests by United Fruit. Particularly suspect were the labor laws borrowed from the New Deal, which sought to improve working conditions and provide some kind of compensation for work-related injuries. Even worse, the new laws gave workers the right to form unions and, if necessary, to strike. To the top executives of United Fruit, accustomed to having their every whim turned into law in Guatemala (and unhappy with Roosevelt’s domestic reforms anyway), the idea of sharing economic power in Central America was unthinkable. Their resistance to reforms, and their belief that the people of Guatemala were not entitled to the same freedoms as the citizens of the United States, eventually embittered Arevalo. In his valedictory speech in March 1951, he had noted with no small amount of scorn the irony of this opposition from “the banana magnates, co-nationals of Roosevelt, [who] rebelled against the audacity of a Central American president who gave to his fellow citizens a legal equality with the honorable families of the exporters ...”

The tensions of the Arevalo years came quickly to a head during the administration of his successor, Jacobo Arbenz. If Arevalo had focused on improving educational opportunities, Arbenz wanted land reform. Even before he took over, he announced that United Fruit would have to respect the Guatemalan government as the arbiter in any disputes between labor and management. That was a truly revolutionary concept, for it took the right to regulate economic disputes from the company and awarded it to the country. Arbenz put forth a number of other demands, that made clear he was a new and obstinate foe. There was a strike between workers and the company, which the company was unwilling to settle. The Guatemalan courts ruled in favor of the workers, but anxious to show that it was bound by no jurisdiction save its own, United Fruit laid off the four thousand workers. The Guatemalan court responded by suggesting that a 26,000-acre farm belonging to United Fruit be confiscated as a guarantee for the workers’ back wages. This marked an escalation of grievance on both sides. In March 1952 the company agreed to pay $650,000 to the workers.

There was almost a coup attempt in 1952. It was called Operation Fortune, and it was originally promoted by Nicaragua’s Somoza, who was extremely unhappy with the new direction taken by the Guatemalan government, which he saw as threatening his own autocratic rule. He told the Americans, “Just give me the arms and I’ll clean up Guatemala for you in no time.” Beetle Smith, at the CIA, and Truman apparently approved the idea. The plan called for arms to be shipped from the United States to Nicaragua by United Fruit company ships in boxes labeled
AGRICULTURAL MACHINERY
. But shortly after the ship left for Nicaragua, a CIA operative approached Edward Miller, the assistant secretary of state for inter-American affairs, and asked him to sign a receipt for the arms, on behalf of State’s munitions department. Miller immediately got in touch with David Bruce, the undersecretary of state, who brought it to Acheson, who in turn went to Truman and stopped the operation.

Arbenz’s critical land reform, known as Decree 900, was passed by the Guatemalan national assembly in June 1952. To his supporters it was the key to the future. Fertile cultivated land was to be given in packets from 8.5 to 17 acres for a peasant family, and in lots from 26 to 33 acres if it had lain fallow. In the succeeding eighteen months, despite the opposition of large landholders, some 100,000 Guatemalan families (almost all of them Indian) received 1.5 million acres of land, for which the government paid $8.3 million in long-term bonds. Arbenz himself gave up 1,700 acres.

Arbenz refused to heed the warnings of various American officials that the land expropriation would be viewed in the north almost as declaration of war. By February 1953, some 234,000 acres on the Pacific coast had been expropriated from United Fruit. That was enough for Washington. From then on, the coup plotting went into high gear. In February 1954 the government expropriated an additional 173,000 acres from the Caribbean coast. Worse, the government decided to pay only $1.185 million in compensation—the exact figure at which the company, in its own devious way, had chosen to value the same land for tax purposes. United Fruit was furious, and in April 1954 the U.S. State Department, acting on its behalf, presented Arbenz with a bill of $15.8 million for the land.

In all of this there was precious little evidence that the Arbenz government was dominated by Communists. But Washington began to gradually tighten the screws on Arbenz. It moved to isolate him by refusing to sell him any arms. In October 1953 Jack Peurifoy was sent down as ambassador. It was an important signal a coup might be in the works, for not only had Peurifoy played an important role in crushing the Communists in Greece, he had helped hammer different, fractious right-wing groups in that country into an anti-Communist coalition. In addition, he was a Democrat, in case the operation failed. If anyone had to take the fall, let it be someone with close connections to Acheson. Peurifoy was conservative, a hard-line anti-Communist, in his own words, “a Star-Spangled Banner guy.”

He was not a man much given to the subtleties of policy, and his marching orders, as far as he was concerned, were to get rid of Arbenz. Almost the first question he asked Marian Lopez-Herrarte, a wealthy Guatemalan landowner with ties to the CIA, was what it would take to topple Arbenz. Would an American boycott of Guatemalan coffee do it? No, said Lopez-Herrarte, the government would still manage to smuggle out enough through El Salvador. But if the Americans cut off all Guatemala’s oil, “the government will fall in a week.” Peurifoy, Lopez-Herrarte thought admiringly, “seemed much more C.I.A. than State Department to me.”