Thy Will Be Done

by Gerard Colby

  The speed of Johnson’s recognition pleased Brazil’s new leaders, who had not been getting a good reception in Latin America’s press. Johnson’s congratulatory message, on the other hand, shocked many followers of John F. Kennedy. The late president’s practice was to break diplomatic relations and pending aid when military coups, most often with CIA backing, took place. Kennedy had done so in Ecuador, Peru, Guatemala, Honduras, Argentina, the Dominican Republic, and Haiti.

  The Johnson administration had given no cause for such illusions. It had already pronounced the Mann Doctrine of limited social reforms and toleration of military rule on March 18, when Assistant Secretary Mann called in Gordon and other ambassadors from Latin America to explain what New York Times reporter Tad Szulc described as “a radical modification of the policies of the Kennedy administration.”45 No clearer message needed to be sent to the generals of Brazil, other than speedy recognition, that is.

  Later, both Gordon and Walters would deny any U.S. involvement in the coup.46 “Neither the American Embassy nor I personally played any part in the process whatsoever,”47 Gordon, under oath, told skeptical senators in 1966 during his confirmation hearings as Johnson’s new assistant secretary of state for inter-American affairs.

  Walters was with Castelo Branco at the general’s home on April 6 when Governor Lacerda announced over the radio that Castelo Branco was to be the presidential candidate of the rebel coalition. Castelo Branco and the rebel governors had conferred that morning on the drafting of the first of a series of arbitrary Institutional Acts that established military rule by decree. The group had agreed to declare the de facto president, Castelo Branco, the legal president with wide powers of arrest, suspension of constitutional guarantees of due process and voting rights, and dismissal from office of all elected federal, state, and local officials who had supported the overthrown constitutional government. Such supporters were condemned to “political death,” meaning they could neither act nor speak on public affairs.

  The Johnson administration, apprised of these actions by the CIA,48 quietly exercised the kind of sweeping transnational power that would have been the envy of imperial Rome. The CIA was ordered to conduct close surveillance of Goulart after he arrived in Uruguay. Secretary of State Rusk ordered the U.S. Embassy in Montevideo to insist that Goulart had voluntarily abandoned Brazil’s presidency. Thus Rusk hoped to persuade the Uruguayan government to deny Goulart the refugee status that would have permitted him to organize politically more freely.49

  At the same time, the CIA’s Rio station sent some of its most prized Brazilian agents to Uruguay as, respectively, Brazil’s new ambassador, first secretary, and military attaché to run penetration and propaganda operations against Goulart supporters in the exile community.50

  The Brazilian generals moved quickly to consolidate their seizure of power. On April 9, after Congress hesitated to give them authority, they issued their first Institutional Act, suspending the rights of 1,150 political leaders, including former President Juscelino Kubitschek, and abrogating the Constitutions direct election of the president, so the Congress, now purged of its Labor party-led majority coalition, could name Castelo Branco as Goulart’s successor.

  Castelo Branco then turned to filling his three most important posts. To oversee Petrobrás, he appointed General Adhemar de Queiróz, later the president of ALCOA’s Brazilian subsidiary, who pledged to give Petrobrás a “total cleaning of extremist elements.”51

  It was an easy task. The entire staff of Petrobrás in Rio had already been imprisoned as alleged saboteurs;52 when they were released, an air of terror hung over Petrobrás as thirty teams of investigators combed through employee files and financial records, producing the inevitable public report on corruption. Now came the purges, justified by precoup “financial irregularities.”

  These purges paved the way for the return of the refineries to their previous owners. Petrobrás made a perfunctory effort to uphold the nationalization decree, and the Supreme Court, now arbitrarily expanded by President Castelo Branco, quashed it. As for Goulart’s nationalization of the marketing of oil products, it was ignored. Standard Oil of New Jersey’s Esso was again in charge, leading a pack of companies that eventually included Shell, ARCO, and Texaco.53

  For his intelligence agency, the National Information Service (SNI), Castelo Branco turned to General Golbery do Couto e Silva, later the president of Dow Chemical’s Brazilian subsidiary. Under Golbery, SNI became the subject of controversy when two dozen cases of torture were documented by the press during the next six months. Some of the victims were Communist party members, some were socialists, and most were Catholic peasants and labor leaders. One was a Catholic priest. But the most flagrant atrocities went unprotested until 1967 because they were occurring in the jungle, and to Indians whose only crime was trying to defend their land.

  For this, responsibility was shared by SPI, private developers who hired pistoleiros (hired guns), the military, and perhaps most important, the quiet, refined presence of Castelo Branco’s third crucial appointee: Roberto Campos, former ambassador to the United States, as minister of finance and planning.

  Campos saw development of the Amazon by American companies as a critical part of Brazil’s economic growth. In July, he and Castelo Branco ended a ten-year suspension of plans by the U.S. Geological Survey to conduct aerial mapping of the Amazon to detect mineral deposits. Now the U.S. Air Force was invited in.

  In October, Campos welcomed news that the World Bank was sending its largest-ever mission on a seven-week tour of Brazil’s interior.54 The Johnson administration had released $200 million in aid that was previously pledged to Goulart and delivered another $50 million AID loan shortly after Campos announced that he was reconsidering Goulart’s 10 percent limit on profit repatriation.55 In November, Campos’s Ministry of Planning and Economic Coordination published his manifesto for Brazil’s future. Program of Economic Action of the Government predicted that hundreds of millions of dollars in foreign investments would stimulate Brazil’s stabilization and growth. His predictions rested on his “theory of constructive bankruptcy,” a denationalization policy that turned petrochemical development, for example, away from Petrobrás and toward Union Carbide and Phillips Petroleum. It also placed Brazilian-owned firms at a competitive disadvantage by giving foreign firms investment guarantees, profits-repatriation rights, special exchange rates in case of the devaluation of the cruzeiro, and dollar-based duty and tax subsidies.56

  Chase Manhattan Bank’s former chairman, John J. McCloy, presided over the first concrete result of Campos’s new policy. On November 6, McCloy, representing Hanna Mining and escorted by Ambassador Gordon, paid a visit to President Castelo Branco “to discuss company plans to develop iron ore deposits totalling an estimated 4 billion tons” and the company’s “long-standing proposal to build an iron-ore shipping port at Sepetiba Bay.” The port was essential to making Hanna’s concession, earlier canceled by Quadros, profitable. McCloy argued his case, knowing that Governor Carlos Lacerda wanted to build his own state-owned steel plant in Guanabara and opposed the Sepetiba Bay project in favor of Rio.

  McCloy also realized, as did Castelo Branco, that Minas Gerais’s governor disputed the Hanna concession in his state, as did the chief of Castelo Branco’s army. But none of these men was more important to the new regime than the United States, especially after Ambassador Gordon outlined the U.S. “financial and economic mission to Brazil.”57 Two weeks later, the Johnson administration leaked plans to provide Castelo Branco with another $400 million in aid.58

  On December 15, the aid package was announced in Washington. In addition to the promised $400 million, it provided for $450 million more in loans from private banks guaranteed by the International Monetary Fund, the Inter-American Development Bank, and private investment firms.59” All loans, of course, would have to be paid back; debt payments could be rescheduled, but only at the consent of the lending institutions actually making the loans, that is, the bank
s, including Chase Manhattan.

  On December 23, a grateful Castelo Branco decreed a new mining code endorsing private development of Brazil’s iron-ore reserves. This code triggered the release of $28.8 million from Washington’s Inter-American Development Bank.60 But Hanna, the test case for all potential American investors, still faced the Brazilian Supreme Court. The following October, McCloy, again escorted by Ambassador Gordon, would meet with Castelo Branco and the minister of mines to urge the restoration of Hanna Mining’s contested concession.61 Backed by Campos, who had served as Hanna’s technical adviser, Castelo Branco issued the Second Institutional Act. The act had two purposes: to respond to the stunning electoral defeat that month of the regime’s gubernatorial candidates by banning all existing political parties and continuing the power to rule by decree and suspend Congress, and to pack the federal appeals courts and Supreme Court with military backers to outnumber judges who had been appointed by Kubitschek and Goulart. (Hanna won its case in June 1966 against token government opposition before an overhauled Court of Appeals.)

  There were other paybacks.

  The inflated purchase of American Power and Light’s subsidiaries, negotiated at $70 million by Campos and canceled by Goulart, now went through at Campos’s urging. Only now the price was $135 million, plus a $17.7 million penalty as “compensation” for the delay.62

  In May 1964, a month after the coup, Brazil had broken off relations with Cuba; a year later, it joined the Johnson administration’s resolution of condemnation of Cuba in the Organization of American States (OAS). The previous month, at General Vernon Walters’s request, Castelo Branco had provided 1,500 of the OAS’s 2,500 troops (as well as their nominal commander) that backed U.S. Marine intervention in the Dominican Republic.63 The Brazilian foreign minister, who then toured South American capitals urging the creation of a permanent OAS strike force, was another old hand at intrigue, Petrobrás’s first president, Juracy Magalhães.

  The Rockefellers made no effort to hide their feelings about the coup in Brazil. Angry over declines in the stock market and therefore the net asset value of the Crescinco Fund, IBEC officials had privately charged Goulart with “governmental mismanagement.”64

  “The market is very unstable and weak, reacting violently to rumors of a political nature,” one official had written Richard Aldrich in January. “The President is constantly being denounced for permitting communist infiltration, arming labor syndicates and preparing for a coup.”65 A week before the coup, Berent Friele analyzed Brazil’s crisis for Nelson Rockefeller and Henry Kissinger. He dismissed as demagoguery Goulart’s request for constitutional amendments to give illiterates and privates and noncommissioned officers the right to vote and to allow payments for nationalized properties to be made in bonds, rather than in cash, to speed up his agrarian reform program. “Goulart’s real objective is to obtain an amendment … which will permit him to be a candidate for re-election in October 1965 or to find an excuse for perpetuating himself in office by force,” Friele wrote.66

  Friele continued this rationale to support the army after its coup. “Communists are being rounded up all over the country,” he wrote. “In spite of criticism of highhandedness and over-zealousness in certain cases, the new regime enjoys universal respect and represents the will of the great masses of the Brazilian people.… It is my hope that the United States and the entire free world will be understanding and sympathetic.”67

  Nelson was. “Permit me to congratulate your excellency and the freedom loving people of your great country on having won a significant victory for democracy and constitutional rights without bloodshed and horrors of civil war,” he cabled Brazil’s interim president. “Brazil has set an outstanding example to the entire world and demonstrated its determination to reject communism and solve its problems as a free and independent nation.… Accept my very best wishes for continued success in your patriotic efforts.”68

  IBEC’s 1964 annual report was filled with praise for the generals: “During 1964 a popular revolution in Brazil redirected the trend of the country’s government by installing a new soundly-based administration under President Humberto Castelo Branco, dedicated to the improvement of the welfare of the Brazilian people through constitutional means. Many businesses in Brazil are going through a very difficult period because of the Government’s effort to stem runaway inflation through a variety of means, including severe credit restrictions. However, your company and business generally are patriotically supporting the program and all have confidence in its eventual success.”69

  David, attending a conference on Latin America at West Point in the fall of 1964, revealed to a discussion group that “it had been decided quite early that Goulart was not acceptable to the United States.”70

  Nelson was more partisan. He blamed the coup on President Kennedy and the Democrats. “He argued,” reported the New York Times, “that this nation under the Democrats had encouraged the Government headed by President João Goulart, which was overthrown yesterday. Encouragement was given although the Brazilian President had placed Communists in government positions in opposition to the wishes of many of Brazil’s state governors.”71

  On the same page, the New York Times carried a small item noting that on Easter Sunday the waiting line at President Kennedy’s grave site in Arlington National Cemetery was so long that there was a wait of more than an hour and a half to view the grave.

  PYRRHIC VICTORIES

  For millions of Americans, the television image was riveting: Governor Nelson Rockefeller, waiting patiently to speak to the Republican Convention and the nation, while howling delegates, their faces skewed by hate, booed.

  Nelson had just called for support for a resolution against extremism, and the Goldwaterites had taken the bait, exposing their fanaticism and intolerance on national television, all but killing any chance for their own candidate.

  Nelson knew, as did much of the nation, that Barry Goldwater had refused to disavow support from the ultrarightist John Birch Society. He also knew, as most Americans did not, that Goldwater and the Birch Society were both heavily funded by J. Howard Pew, owner of one of Standard Oil’s major rivals, the Sun Oil Company.72

  Nelson had not underestimated the Pews. They were part of a powerful, ultraconservative network of corporate leaders in the Republican party, who had made no secret of their preference for “Mr. Conservative.” Nelson knew these enemies and judged them to be beatable, especially after Kennedy’s death. The assassination had bred fear of extremes in the voters’ hearts, or so Nelson thought.

  Nelson had played the theme successfully in the Oregon primary, beating Goldwater handily. But California had a strong streak of conservatism, especially in the south, where Protestant Fundamentalism, Pentagon contracts, and the exploitation of Mexican farmhands shaped much of the region’s politics.

  Goldwater had forged a new alliance of suburban Roman Catholics and rural and suburban Protestant Fundamentalists, who were uneasy about Nelson’s support for civil rights and so found it easier to set their case on the higher ground of private morals: opposing a wealthy liberal “home wrecker” who was also a political “wrecker” of the Republican party. To Nelson’s surprise, nothing could stop this religious firestorm, not even the $3 million he spent on the primaries (including $250,000 from David and $100,000 from sister Babs).73 Defeat seemed certain.

  In July, as Nelson addressed a crowd of 40,000 who had gathered in San Francisco to show support for civil rights, young Goldwater delegates poured into the city’s Cow Palace. It seemed obvious that Goldwater had won the Republican Convention where it mattered most, at the grass roots, electing delegates to the state conventions. Now, dominating the convention, the zealots would at last have their day. They would defeat the Eastern Establishment that had ruled the Republican party since John D. Rockefeller had helped put William McKinley in the White House in 1897. And they would mark the occasion for the world to see, by confronting Nelson Rockefeller, the liberal governor of the
nation’s richest state.

  “This is still a free country, ladies and gentlemen,” Nelson goaded the young Republicans before him. Stubbornly and patiently, he stood on the platform as a symbol of courage, exposing the booing to the glare of the world’s television cameras for a full quarter of an hour. When it was over, he had extracted a final victory over them and Barry Goldwater. Some said it was his finest hour in the Republican party.

  It was a Pyrrhic victory. When his shining hour had passed and his resolutions for civil rights and against extremism were duly stoned as heresy, Nelson was left with his party’s enmity.

  Goldwater’s acceptance speech, declaring, “Extremism in defense of liberty is not a vice,” did allow Nelson to issue a final indictment. He called the Republican candidate’s views “dangerous, irresponsible and frightening.”74 Then he flew to the Rockefeller ranch at Jackson Hole, Wyoming, to join Happy, leaving mass defections to Lyndon Johnson in his wake.

  Whereas Nelson had never been able to capture the moderate conservative mainstream of the Republican party, Johnson did, thanks partly to his own foreign-policy coup, Brazil. Ironically, the fall of Goulart that Nelson had cheered in April sealed both his and Goldwater’s fate in the race for the presidency.

  “In order to win all, or practically all, of the 50 American states next November,” wrote a Goldwater backer two weeks after the coup, “Lyndon Johnson will have to convert millions of Republicans, Southerners, reactionaries and anti-Texas hate-mongers, a goal toward which he took a giant step by his instant recognition of the military coup in Brazil.”75

  Johnson did just that. He won the greatest landslide victory since Franklin D. Roosevelt’s reelection in 1936.

  Johnson began calling the Rockefellers to the White House as special advisers on Latin America, population control, and conservation. Yet the joy had gone out of politics for Nelson, perhaps long before the 1964 primaries. Norman Mailer had noticed the change in Nelson’s face even while victory in California still looked possible. “He had a strong, decent face and something tough as a handball in his makeup, but his eyes had been punched out a long time ago—they had the distant lunar glow of the small sad eyes you see in a caged chimpanzee or a gorilla.”76