Ike's Spies (36 page)

In 1947 the Arévalo government enacted a new Labor Code. The code called for compulsory labor-management contracts; it required collective bargaining in good faith; it expressly acknowledged the right of workers to organize; it established the principle of minimum salaries. At that time the
FBI
was still responsible for espionage in Latin America, and J. Edgar Hoover's men began compiling dossiers on Arévalo and other leading figures in the government. These documents, which have recently been declassified under the Freedom of Information Act, reveal that most of the
FBI'S
informants were former Ubico supporters who naturally enough stressed the Communist influence in the new government. The main “proof” was Arévalo's encouragement of labor unions.
¹¹

Much of the
FBI'S
evidence of Guatemala's penetration by international communism was equally silly. For example, in 1950, Tapley Bennett, the State Department's officer in charge of Central American Affairs, charged that Guatemala's failure to sign the 1947 Rio de Janeiro Treaty of Reciprocal Assistance (which called for American nations to come to each other's aid in the event of an armed attack) was “a pertinent example of the influence on Government thinking [in Guatemala] by Communist-minded individuals.”
¹²
In fact, Guatemala's opposition stemmed from its historic controversy with Honduras over Belize. Even the military government that the United States set up in Guatemala in 1954, when it signed the Rio Treaty, added the reservation, “The present Treaty constitutes no impediment preventing Guatemala
from asserting its right with respect to the Guatemalan territory of Belize by any means by which it may deem most advisable.”
¹³

There was, however, some real evidence of Communist infiltration. In the regularly scheduled elections of 1950, the campaign manager of winning candidate Jacobo Arbenz Guzmán was José Manuel Fortuny, founder of the Guatemalan Communist Party and editor of its newspaper. (But Arbenz vehemently denied that he himself was a Communist, and Fortuny lost his own bid for a seat in the National Assembly.) Arbenz was inaugurated on March 19, 1951; two weeks later Fortuny signed, for the first time, a public manifesto as the Secretary-General of the Communist Party of Guatemala. In October the Confederation General de Trabajadores de Guatemala became the single national labor federation, with a self-proclaimed Communist as Secretary-General. Two months later, the
CGTG
affiliated with the World Federation of Trade Unions, the Communist international labor front.
¹⁴

One man who never questioned the Communist influence on Arbenz was the
CIA'S
agent in Mexico City, E. Howard Hunt. Of medium height, Hunt was broad-shouldered, powerful, sure of himself. Casual of manner, soft of voice, he was nevertheless deliberate in his movements, straightforward in his actions. Articulate and intelligent, he had a flair for descriptive and imaginative writing and a penchant for action. He was quick to form judgments and brutal in expressing them.

In the early fifties, Hunt was sending in reports from Mexico stressing the dangers in Guatemala. Most of his information came from Mexican students who had conferees in Guatemala. Hunt was, in his own words, “subsidizing and directing a very powerful anti-Communist student organization in Mexico, and these young people, and it's not proper to call them agents because they didn't know who was behind them, were reporting student activities in Guatemala, and this was very alarming.”

When asked about Arbenz himself, Hunt replied, “Well Fortuny was the principal Communist. He and Arbenz' wife, who came from a very good Salvadorean family (in fact they became neighbors of ours years later in Montevideo). Arbenz was a very weak individual. His two daughters were beautiful and nubile.… She [the wife] was really the agitator, and he was sort of one of those faceless persons.… She on the other hand represented the might of the Communist world. He was I would say
their puppet.
^*
Of course I had ample opportunity in later years to observe them in Montevideo. We even belonged to the same country club. He liked to live well.”
¹⁵

Whether or not Arbenz was the weakling Hunt thought he was—his portrait shows a man strikingly handsome, in a Spanish Don sort of way, with a high forehead and long, aristocratic nose, who looked like he might have been a bullfighter if he had not become a politician—the Guatemalan President did have enough courage to push through the Agrarian Reform Law of 1952. In the words of one careful historian of the Guatemalan revolution, “The law itself is widely accepted by critics writing in both Spanish and English as justified under Guatemalan conditions and as basically aimed at idle land.”
¹⁶

The bill redistributed all estates taken by the government from German owners during World War II. More important, it expropriated some 240,000 acres of United Fruit's Pacific coast holdings, all of it idle land, and (a year later) another 173,000 idle acres on the Atlantic coast. This left the company with 162,000 acres, of which only 50,000 were under cultivation. Arbenz offered to pay $600,000 for the land, but in long-term non-negotiable agrarian bonds.
¹⁷
Eisenhower, while admitting that “expropriation in itself does not, of course, prove Communism,” nevertheless charged that the compensation offered was “woefully inadequate” for “this discriminatory and unfair seizure.”
¹⁸
The figure $600,000, however, was not pulled out of thin air—it was United Fruit's own declared valuation for tax purposes.

The company, furious, struck back with all its considerable resources. Although it was not able to force the Truman administration to send in the Marines or otherwise actively intervene, it did use its contacts and influence to picture Arbenz as a Communist to be feared. These United Fruit contacts included Spruille Braden, Assistant Secretary of State for Latin American Affairs, later public relations director for the company, and Edward Miller, Jr., another assistant secretary who had been a member of Sullivan and Cromwell. They helped paint the picture of Arbenz that United Fruit wanted the American people to see. The company launched a sizable publicity campaign and sponsored junkets to Guatemala.

Truman's Guatemalan ambassador, Richard Patterson, Jr., said that he could tell a Communist by applying the “duck test.” He explained, “Many times it is impossible to prove legally that a certain individual is a Communist; but for cases of this sort I recommend a practical method of detection—the ‘duck test.' … Suppose you see a bird walking around in a farm yard. This bird wears no label that says ‘duck.' But the bird certainly looks like a duck. Also, he goes to the pond and you notice that he swims like a duck. Then he opens his beak and quacks like a duck. Well, by this time you have probably reached the conclusion that the bird is a duck, whether he's wearing a label or not.”
¹⁹

Patterson's successor, appointed by Ike, was John Peurifoy. According to Howard Hunt, Peurifoy got the job for three reasons. First, the Republicans were stuck with him. “You know Peurifoy started out as an elevator operator,” Hunt explained, “and with the oncoming Eisenhower administration he would have been cast out, but the Democrats did what they are so skillful at doing, they encapsulated their people, giving them civil service protection.… There was a hell of a stink at the time. In any event, Peurifoy was an unwanted man at the ambassadorial level.” Second, he had been ambassador to Greece in the late forties, at the time of the Truman Doctrine, so he had experience fighting Communists. Third, “he was expendable. Nobody in the Eisenhower administration owed him a damn thing … and they needed a guy who could take the heat in case things went wrong.”
²⁰

Peurifoy applied Patterson's duck test to Arbenz and it came out positive. “I spent six hours with him one evening,” Peurifoy explained, “and he talked like a Communist, he thought like a Communist, and he acted like a Communist, and if he is not one, he will do until one comes along.”
²¹

Official Washington, in short, was convinced that with Arbenz the Communists had succeeded in establishing their first regime in the New World. Given what had recently transpired in China, Czechoslovakia, East Europe, and in Vietnam (the Geneva Conference on Vietnam was just then getting under way); given Ike's own views on Communist aggression, as well as the Dulles brothers' and that of nearly every senator and representative in Washington; given the
CIA'S
recent success in Iran; given that the
CIA
had already set up an operation, code name
PBSUCCESS
, to
overthrow Arbenz, it was probably inevitable that the United States would intervene in Guatemala, United Fruit or no United Fruit.

John Foster Dulles himself stated explicitly at the press conference called to announce the shipment of arms on the
Alfhem:
“If the United Fruit matter were settled, if they gave a gold piece for every banana, the problem would remain just as it is today as far as the presence of Communist infiltration in Guatemala is concerned. That is the problem, not United Fruit.”
²²

Richard Bissell, Jr., who was intimately involved in
PBSUCCESS
, said in an interview in November 1977, “I have a strong conviction that United Fruit's interests would not have been particularly persuasive on Allen Dulles. I think by this time in his career my guess is that Foster Dulles was infinitely less interested in the United Fruit Company than he was with communism.… As for Mr. Eisenhower and Bedell Smith, two military men, I would bet very heavily that the issue was not United Fruit, but communism.”
²³

All of which may very well be true, but what is also absolutely true is that United Fruit had some powerful supporters in the Eisenhower administration. Aside from the Dulles brothers, and their connection with Sullivan and Cromwell, there was John Moors Cabot, the Assistant Secretary of State for Inter-American Affairs. He was a major stockholder in United Fruit. His brother, Thomas Dudley Cabot, the State Department's Director of Security Affairs, had previously been a director of United Fruit and president of the First National Bank of Boston, the registrar bank for United Fruit. Eisenhower's Secretary of Commerce, Sinclair Weeks, had been another director of the First National Bank. Robert Cutler, Special Assistant to the President for National Security Affairs, had been board chairman of the Old Colony Trust Company, United Fruit's transfer agent. Others in the Eisenhower administration had direct financial interests in Guatemala, including Robert Hill, ambassador to Costa Rica, and Henry Cabot Lodge, Jr., U. S. Representative to the United Nations. Hill later became a director of United Fruit. So did Bedell Smith after he left the government.
²⁴

If one were to apply the duck test to this list of worthies, one might be forgiven for concluding that despite Dulles' disclaimers, despite Bissell's vehement denials, the United Fruit Company did
play a significant role in convincing Ike that, whatever his scruples about not intervening in the internal affairs of a sister republic, the Arbenz regime had to be toppled.

But Eisenhower himself told one of his oldest friends, General Alfred Gruenther, that policies which defended individual companies without considering the adverse effects such policies had on nationalist movements were shortsighted and “Victorian.” He believed that the Western powers should make gradual concessions to satisfy the spirit of nationalism in developing countries, thereby assuring their continued support. As he wrote his friend Bill Robinson of the New York
Herald Tribune
, if the United States followed policies inimical to the economies of the developing nations, “we will most certainly arouse more antagonism.” Then the possibility of these countries “turning Communist would mount rapidly.” But it was entirely another matter once a country had already turned Communist, as Ike thought had happened in Guatemala.
²⁵

Eisenhower made his decision and ordered the
CIA
to go ahead with
PBSUCCESS
. The
CIA
, flushed with its triumph in Iran, was about to overthrow another government.

PBSUCCESS ALMOST GOT STARTED
in the Truman administration. In 1952, Anastasio Somoza, the Nicaraguan dictator, approached Bedell Smith, then director of the
CIA
, with a proposal. If the
CIA
would send him sufficient arms, he would take care of the Arbenz problem. Smith approved and got the shipment ready, but the State Department learned of the deal and vetoed it.

A year later, in August of 1953, Thomas Corcoran, former aide to FDR and then a lobbyist for United Fruit, approached the by-then Under Secretary of State Smith. “The intervention of Tommy the Cork with Bedell Smith was decisive,” Howard Hunt said, “that is according to everything I've heard and I've never heard anything in contrast.”
²⁶

Corcoran told Smith that both Nicaragua and Honduras were prepared to act against Arbenz, provided they were assured of American help. He also said that Colonel Carlos Castillo Armas and Miguel Ydígoras Fuentes (Arbenz's major opponent in the 1950 election) had met in Tegucigalpa, Honduras, to sign a “gentleman's pact” promising to cooperate to overthrow Arbenz. Castillo Armas told Ydígoras Fuentes that they could count on American
support. In September, Castillo Armas wrote Somoza saying, “I have been informed by our friends here that the government of the North, recognizing the impossibility of finding another solution to the grave problem of my country, has taken the decision to permit us to develop our plans.”
²⁷

Allen Dulles was the driving force behind
PBSUCCESS
in the United States. Richard Bissell stated in an interview that Dulles “was closer to the Guatemala operation than he was to the Bay of Pigs.… The Guatemalan operation was authorized at a higher level at the very beginning, like the Bay of Pigs operation, and was regarded as a very major operation, with potentially political overtones and the rest.”
²⁸