The Untold History of the United States

by Oliver Stone

  With Iran producing 40 percent of Middle Eastern oil, the United States understood the importance of easing the tension. It had been pushing the British to improve their offer and avoid the crisis since 1948. Truman derided Sir William Fraser, the head of Anglo-Iranian, as a “typical nineteenth century colonial exploiter.”119

  Members of the British cabinet responded in the fashion typical of twentieth-century colonial exploiters and debated the pros and cons of invading. It became clear that such an invasion would prove costly and might not succeed. But capitulating to the Iranians, some felt, could put the final nail in the empire’s coffin. “If Persia were allowed to get away with it, Egypt and other Middle Eastern countries would be encouraged to think they could try things on,” Defense Minister Emanuel Shinwell feared. “The next thing might be an attempt to nationalize the Suez Canal.” Opposition leader Winston Churchill told Prime Minister Clement Attlee that he was “rather shocked at the attitude of the United States, who did not seem to appreciate fully the importance of the great area extending from the Caspian to the Persian Gulf: it was more important than Korea.” Foreign Secretary Herbert Morrison also deplored the policy of “scuttle and surrender.”120

  Acheson attempted to mediate, fearing that military action by Great Britain in the south might provoke a Soviet incursion in the north. Though frustrated by Mossadeq’s intransigence, Acheson sympathized with the Iranians’ position. He convinced Averell Harriman to go to Tehran to defuse the situation. Harriman reported that the “situation that has developed here is a tragic example of absentee management combined with world-wide growth of nationalism in underdeveloped countries.”121 The British put the invasion on hold, initiating economic warfare in its stead. They embargoed oil coming out of Iran and goods going in. With U.S. approval, the Bank of England halted the finance of and trade with Iran. The Iranian economy slowly ground to a halt.

  Winston Churchill and his Conservative Party returned to power in October 1951, increasing the pressure for military intervention. Churchill had earlier written to Truman that “Mussy Duck” was “an elderly lunatic bent on wrecking his country and handing it over to communism.”122 When Mossadeq got wind of British plans to launch a coup, he shut the British Embassy and expelled its employees.

  When Eisenhower took office, the Dulles brothers met with Kermit “Kim” Roosevelt, Theodore Roosevelt’s grandson and the CIA’s top Middle East expert, to discuss eliminating “that madman Mossadeq.”123 John Foster Dulles acknowledged that Mossadeq wasn’t a Communist, but he feared a takeover by the Communist Tudeh party that would deliver Iran’s oil to Moscow. Soon, he argued, the rest of Middle Eastern oil would come under Soviet control. Mossadeq had moved closer to Tudeh as the crisis unfolded. The new administration portrayed Mossadeq as an unstable extremist—“not quite sane,” according to U.S. Ambassador Loy Henderson.124

  Behind the scenes, the CIA went to work, launching “Operation Ajax” headed by Roosevelt. British intelligence, MI6, provided support. But things did not go as planned. When the CIA’s Tehran station chief opposed this tawdry operation as being inimical to the United States’ long-term interests, Allen Dulles fired him. Mossadeq uncovered the shah’s collaboration with the coup attempt, forcing the shah to flee the country.

  The CIA, meanwhile, had been buying up Iranian journalists, preachers, army and police officers, and members of parliament, who were instructed to foment opposition to the government. The CIA also purchased the services of the extremist Warriors of Islam, a “terrorist gang,” according to a CIA history of the coup.125 In August, Roosevelt began setting mobs loose to create chaos in the capital, Tehran. He spread rumors that Mossadeq was a Communist and a Jew. His street thugs, pretending to be members of the Tudeh party, attacked mullahs and destroyed a mosque. Among the rioters was Ayatollah Ruhollah Musavi Khomeini, Iran’s future leader. On August 19, 1953, in the midst of the anarchy, Roosevelt brought General Fazlollah Zahedi out of his CIA hiding place. Zahedi announced that the shah, then in Italy, had appointed him the new prime minister. After an armed battle, coup plotters arrested Mossadeq and thousands of his supporters. Some were executed. Mossadeq was convicted of treason and imprisoned. The shah returned to Tehran. At a final meeting with Roosevelt, the shah offered a toast: “I owe my throne to God, my people, my army—and to you.”126

  The American oil companies were also grateful. Previously frozen out of Iranian oil production, five U.S. oil companies now received 40 percent ownership of the new consortium established to develop Iranian oil. And the United States opened its coffers to the shah. Within two weeks of the coup, the United States granted Iran $68 million in emergency aid, with more than $100 million more soon to follow. The United States had gained an ally and access to an enormous supply of oil but in the process had outraged the citizens of a proud nation whose resentment at the overthrow of their popular prime minister and imposition of a repressive regime would later come back to haunt it. The shah continued to rule for more than twenty-five years, with strong U.S. backing, by fixing elections and relying on the repressive power of SAVAK, his newly created intelligence service.

  The CIA, having toppled its first government, now saw itself as capable of replicating the feat elsewhere and would attempt to do so repeatedly in succeeding years. The Soviets, therefore, instead of seeing a softening of U.S. policy in the aftermath of Stalin’s death, saw the United States impose another puppet government in a nation with which the Soviet Union shared a thousand-kilometer border as part of an ongoing strategy of encirclement.

  A pro-Mossadeq demonstration in Iran in February 1953. Enormously popular inside his country and well-respected internationally, Mossadeq was overthrown by the CIA in 1953.

  On the heels of this “success” in Iran, the Eisenhower administration targeted the small, impoverished Central American nation of Guatemala. Guatemalans had suffered under a brutal U.S.-backed dictator, Jorge Ubico, whom they overthrew in 1944. Before the reform government took power, 2 percent of the population owned 60 percent of the land, while 50 percent of the people eked out a living on only 3 percent of the land. The Indian half of Guatemala’s population barely survived on less than 50 cents per day. In 1950, Guatemalans elected the handsome, charismatic thirty-eight-year-old Colonel Jacobo Árbenz Guzmán president in an election remarkable for its fairness. At his March 1951 inauguration, he declared his commitment to social justice and reform.

  All the riches of Guatemala are not as important as the life, the freedom, the dignity, the health and the happiness of the most humble of its people . . . we must distribute these riches so that those who have less—and they are the immense majority—benefit more, while those who have more—and they are so few—also benefit, but to a lesser extent. How could it be otherwise, given the poverty, the poor health, and the lack of education of our people?127

  The U.S. media wasted little time in denouncing Guatemala’s Communist “tyranny,” beginning its assault long before Árbenz had time to start implementing his reform agenda. In June, the New York Times decried “The Guatemalan Cancer,” registering “a sense of deep disappointment and disillusionment over the trend of Guatemalan politics in the two months since Colonel Árbenz became President.” The editors took particular umbrage at the growth of Communist influence, complaining that “the Government’s policy is either running parallel to, or is a front for, Russian imperialism in Central America.”128 The Washington Post carried an editorial a few months later titled “Red Cell in Guatemala” that branded the new president of Guatemala’s Congress a “straight party liner” and dismissed Árbenz as little more than a tool.129

  Ignoring his critics, Árbenz set out to modernize Guatemala’s industry and agriculture and develop its mineral resources. To do so meant challenging the power of United Fruit Company, which dominated the Guatemalan economy. Called “the octopus” by Guatemalans, United Fruit reached its tentaclelike arms deep into railroads, ports, shipping, and especially banana plantations. Árbenz announced plan
s for a massive land reform program beginning with the nationalization of 234,000 acres of United Fruit Company land, more than 90 percent of which the company was not using. In all, the company’s 550,000 acres represented approximately one-fifth of Guatemala’s arable land. Árbenz offered to compensate United Fruit in the amount of $600,000, based on the company’s own greatly underpriced assessment of the land’s value in previous tax returns. The company demanded more. Árbenz took steps to appropriate another 173,000 acres. The public relations pioneer and master propagandist Edward Bernays, Sigmund Freud’s nephew, had already launched a campaign to brand Árbenz a Communist. He found willing allies at the New York Times. Bernays paid a visit to Times publisher Arthur Hays Sulzberger. Dutifully, the Times soon began publishing articles about the Communist threat in Guatemala. Leading congressmen, including Senator Henry Cabot Lodge, whose family had gorged on United Fruit for decades, decried this growing Communist menace.130

  Truman took heed of the alleged Communist threat emanating from Guatemala. In April 1952, he hosted a state dinner for Nicaraguan dictator Anastasio Somoza, who had long been persona non grata in Washington. Somoza assured State Department officials that if the United States would provide arms, he and exiled Guatemalan colonel Carlos Castillo Armas would get rid of Árbenz. The Truman administration decided to overthrow Árbenz in September 1952 but reversed course when U.S. involvement was exposed.131

  Eisenhower had no such compunctions. He appointed Jack Peurifoy as his ambassador to Guatemala. Peurifoy, who spoke no Spanish, had been serving in Greece, where his role in helping restore the monarchy to power had earned him the sobriquet “the butcher of Athens.” A photo of the Greek royal family still adorned his desk. His penchant for wearing a gun in his belt led his wife to nickname him “pistol packing Peurifoy.”132 Before Greece, he had helped purge the State Department of liberals and leftists. Árbenz invited the new U.S. ambassador and his wife to dinner. They clashed for six hours over Communist influence in the Guatemalan government, land reform, and treatment of United Fruit. Peurifoy sent Secretary of State Dulles a long cable detailing their discussion that concluded, “I am definitely convinced that if the President is not a communist, he will certainly do until one comes along.”133

  In Peurifoy’s mind, that equated to being a tool of Moscow: “Communism is directed by the Kremlin all over the world, and anyone who thinks differently doesn’t know what he is talking about.”134 In reality, Guatemalan communism was indigenous and the Partido Guatemalteco del Trabajo was independent of the Soviet Union. The Communists held only four of the fifty-six seats in Congress and no cabinet posts. The party had approximately 4,000 members in a population of 3.5 million.

  To suggest that United Fruit had friends among the high and mighty in the Eisenhower administration would be an understatement. The Dulles brothers’ law firm, Sullivan and Cromwell, had written United Fruit’s 1930 and 1936 agreements with Guatemala. Allen Dulles’s predecessor at the CIA, Undersecretary of State Walter Bedell Smith, would become a vice president of the company in 1955. Assistant Secretary of State for Inter-American Affairs John Moors Cabot was a major shareholder. His brother Thomas Dudley Cabot, the director of international security affairs in the State Department, had been president of United Fruit. NSC head General Robert Cutler had been chairman of the board. John J. McCloy was a former board member. And U.S. Ambassador to Costa Rica Robert Hill would later join the board.

  Concerns about United Fruit interests reinforced the Eisenhower administration’s deep-seated anticommunism. In August 1953, administration officials decided to take Árbenz down through covert action. One U.S. official cautioned, “Were it to become known that the United States had tried a Czechoslovakia in Guatemala, the effect on our relations in this hemisphere, and probably in the world . . . could be . . . disastrous.”135 Undeterred, Allen Dulles asked Iran coup instigator Kim Roosevelt to lead “Operation Success,” but Roosevelt declined, not trusting that the operation’s title reflected the prospects on the ground. Dulles then chose Colonel Albert Haney, a former South Korea station chief, as field commander with Tracy Barnes as chief of political warfare. As Tim Weiner points out in his history of the CIA, Barnes had the classic CIA résumé of that era. Raised on Long Island’s Whitney estate, replete with its own private golf course, he matriculated at Groton, Yale, and Harvard Law. Serving with the OSS in World War II, he captured a German garrison, earning him a Silver Star. But because Barnes had a reputation as a bumbler, former CIA director Walter Bedell Smith, a Dulles protégé, was tasked with overseeing the operation.136

  Guatemalan president Jacobo Árbenz Guzmán speaking to supporters in 1954. After his reform efforts upset the United Fruit Company, he was branded a Communist and overthrown by a military junta in a 1954 coup engineered by the CIA.

  In late January 1954, word leaked out that the United States was collaborating with Colonel Castillo Armas to train the invading force. The Guatemalan government then turned to Czechoslavakia for a shipload of arms. The United States loudly decried Soviet penetration of the hemisphere. The chairman of the Senate Foreign Relations Committee, Alexander Wiley, described the allegedly “massive” shipment as “part of the master plan of world communism.”137 The Speaker of the House deemed it an atom bomb in America’s backyard.138

  In a surprising reversal, New York Times correspondent Sydney Gruson began providing coverage of the unfolding Guatemalan crisis that accurately captured that nation’s outrage over U.S. bullying and accusations. Gruson had just been allowed back into the country after having been expelled by the government as “undesirable” in February.139 On May 21, he wrote that U.S. pressure had “boomeranged,” inspiring “a greater degree of national unity than [Guatemala] has experienced in a long time.” Even Guatemalan newspapers “that normally are in constant opposition,” he reported, “have rallied to defend the Government’s action.” “Both newspapers,” he noted, had “assailed what they termed the United States willingness to provide arms to right-wing dictators in the hemisphere while refusing to fulfill Guatemala’s legitimate needs.”140 In another front-page article the following day, Gruson recounted the Guatemalan foreign minister’s charge that the U.S. State Department was aiding exiles abroad and domestic dissidents who were trying to overthrow the government. He reported that the State Department had pressured Guatemala to raise its compensation to United Fruit to $16 million and quoted the foreign minister’s assertion that “Guatemala is not a colony of the United States nor an associated state that requires permission of the United States Government to acquire the things indispensable for its defense and security, and it repudiates the pretension of [the United States] to supervise the legitimate acts of a sovereign government.”141 On the twenty-fourth, Gruson insisted that the United States had chosen the wrong issue to make a stand on and had only sparked a “great upsurge of nationalism” and anti-Americanism.142 Gruson’s days as a Times reporter in Guatemala were numbered. Over dinner, Allen Dulles spoke to his friend Times business manager Julius Adler, who conveyed the administration’s complaints to publisher Sulzberger. Gruson was sent packing to Mexico City.143

  Meanwhile, Peurifoy and other U.S. officials waged a vigorous propaganda and disinformation campaign both inside Guatemala and in neighboring states to discredit the Árbenz government and weaken its hold on power. In June 1954, CIA-trained mercenaries attacked from bases in Honduras and Nicaragua, backed by U.S. air support. When the initial attack stalled, Eisenhower provided Castillo Armas with additional planes. Even British and French officials balked at the thought of supporting such naked aggression. Henry Cabot Lodge, U.S. ambassador to the United Nations, confronted his British and French counterparts and threatened to withdraw U.S. support to Great Britain on Egypt and Cyprus and to France on Tunisia and Morocco if they failed to back the United States on Guatemala.144

  On June 27, Árbenz, assuming that resistance was futile, handed power to a military junta headed by the army chief of staff. That night, he del
ivered a final radio address in which he charged, “The United Fruit Company, in collaboration with the governing circles of the United States, is responsible for what is happening to us.” He warned about “twenty years of fascist bloody tyranny.”145 That night the CIA station chief and another agent visited the new head of the junta and told him, “You’re just not convenient for the requirements of American foreign policy.”146 When he refused to step down, the CIA bombed the parade ground of the main military base and the government radio station. Castillo Armas, who had been trained at Fort Leavenworth, Kansas, returned in a U.S. Embassy plane to head the new government. Dulles addressed the American public on June 30 and applauded the victory of “democracy” over “Soviet communism.” He announced that the situation was “being cured by the Guatemalans themselves.”147 One British official, gagging on Dulles’s mendacity, observed of the speech that “in places it might almost be Molotov speaking about . . . Czechoslovakia—or Hitler about Austria.”148

  Shortly thereafter, Castillo Armas visited Washington and assured Nixon of his fealty. “Tell me what you want me to do and I will do it,” he promised the vice president.149 He received $90 million in U.S. aid in the next two years, 150 times as much as the reform government had received in a decade. He set up a brutal military dictatorship and was assassinated three years later. United Fruit got its land back.

  Dulles said that the country had been saved from “Communist imperialism” and declared the addition of “a new and glorious chapter to the already great tradition of the American States.”150 One retired Marine Corps colonel who participated in the overthrow wrote later that “our ‘success’ led to 31 years of repressive military rule and the deaths of more than 100,000 Guatemalans.”151 The actual death toll might have been twice that number. Árbenz proved to have been optimistic when he predicted “twenty years of fascist bloody tyranny.” The fascist bloody tyranny in Guatemala actually lasted forty years.