GUATEMALA: CIA'S BANANA REVOLT

WELL, BOYS," Ambassador John E. Peurifoy told his assembled staff, "tomorrow at this time we'll have ourselves a pig party."

The scene was the American Embassy on Octava Avenida in Guatemala City, and the unlikely ambassadorial quote was clearly recalled by one of the participants in the meeting. The date was June 18, 1954. The CIA's coup against the Communist-dominated regime of President Jacobo Arbenz Guzman had begun. That afternoon, Colonel Carlos Castillo-Armas, a U.S.-trained Guatemalan exile, had crossed the border from Honduras with about 150 men. Now the invasion was on. It had the full advance approval of President Eisenhower.

Peurifoy, a tough but soft-spoken South Carolinian, was overly optimistic. His party to celebrate Arbenz's downfall had to be postponed for two weeks. What the CIA had planned as an overnight coup dragged on for twelve difficult days. Before it had ended, Peurifoy was deeply involved in political cloak-and-dagger maneuvering. And the President of the United States, over the objections of the State Department, found it necessary, clandestinely, to send in three more fighter planes to bailout the CIA's banana revolt.

Unlike the Bay of Pigs, the 1954 Guatemalan operation succeeded. Like Iran the year before, Guatemala was one of the CIA's early triumphs in the field of overthrowing governments. Some of those who participated have begun to say so openly.

On June 10, 1963, in Washington, Dwight D. Eisenhower made a little-reported but extraordinary speech. The former President for the first time conceded, for all practical purposes, that the United States had overthrown the government of Guatemala in 1954.

"There was one time," he said, "when we had a very desperate situation, or we thought it was at least, in Central America, and we had to get rid of a Communist government which had taken over, and our early efforts were defeated by a bad accident and we had to help, send some help right away." [1]

Eisenhower did not mention Guatemala by name, but his meaning was perfectly clear, particularly since he shared the speaker's platform with Allen Dulles, his Director of Central Intelligence.

What the ex-President was referring to was this: Four days after Peurifoy's ebullient prediction to the embassy staff in Guatemala City, Eisenhower was told that disaster had overtaken the CIA's modest air force, which consisted of a few World War II P-47 Thunderbolts. One had been shot up in action, and another had crashed. The Thunderbolts had been bombing Guatemala City to encourage Arbenz to vacate the Presidential Palace.

Allen Dulles wanted the planes replaced immediately. Henry F. Holland, Assistant Secretary of State for Inter-American Affairs, was aghast. Providing the CIA with planes for Castillo-Armas was one thing before the invasion had actually started. But doing so now, Holland felt, would expose the United States to the hated charge of intervention in Latin American affairs. News of the President's action might leak out, Holland reasoned.

Allen Dulles, however, felt there could be no stopping now. Many months of careful preparation had gone into the Castillo-Armas invasion. Jerry Fred DeLarm, a World War II American fighter pilot who was flying one of the P-47s for the CIA, had enjoyed astonishing success in his raids on Guatemala so far.

A White House meeting was scheduled in the afternoon to discuss the question of the planes.

"Now different people, including Mr. Dulles and a member of the State Department and so on, came into my office to give their differing views," Eisenhower recalled in his 1963 speech.

"And the man *¹ who opposed going any further was very vehement in his representation and he wanted no part. He thought we should stop right there, wash our hands of the thing and let it stand right there. Well, Mr. Dulles was on the other side. And when all of the views were presented, I decided we would go ahead and the orders went out [to send more planes].

"... I said to Mr. Dulles ... before I made this decision I said 'What are the chances that this will succeed?' Well, he said he thought about twenty percent. I told him later, 'If you'd have said ninety percent, I'd have said no, but you seemed to be honest.'

"He told me later, 'Well, you know, I knew that my opponent had lost the argument because he came in your office with three law books under his arm.'"

While campaigning in the 1960 and 1962 elections, Senator Thruston B. Morton, the Kentucky Republican, had spoken just as freely about Eisenhower's role in the Guatemala coup. Morton's remarks in Kentucky did not gain national attention, however, until he repeated them at a party dinner in Baltimore in February, 1963, and on a television program.

Whiting Willauer, Ambassador to Honduras during the Guatemala coup, had openly discussed the CIA's role as far back as 1961. In little-noticed testimony before a Senate Committee [2] Willauer said that after the Guatemala coup,

"I received a telegram from Allen Dulles in which he stated in effect that the revolution could not have succeeded but for what I did. I am very proud of that telegram."

Then the questioning went as follows:

Q. Mr. Ambassador, was there something of a team in working to overthrow the Arbenz government in Guatemala, or were you alone in that operation?

A. There was a team.

Q. Jack Peurifoy was down there?

A. Yes, Jack was on the team over in Guatemala; that is the principal man, and we had Bob Hill, Ambassador Robert Hill, in Costa Rica ... and we had Ambassador Tom Whelan in Nicaragua, where a lot of the activities were going. And, of course, there were a number of CIA operatives in the picture.

Q. What was Mr. Dulles' involvement in that area?

A. Mr. Allen Dulles?

Q. Yes.

A. Well, the CIA was helping to equip and train the anti-Communist revolutionary forces.

Q. Would you say you were the man in charge in the field in this general area of all these operations?

A. I certainly was called upon to perform very important duties, particularly to keep the Honduran Government -- which was scared to death about the possibilities of themselves being overthrown -- keep them in line so they would allow this revolutionary activity to continue, based in Honduras.

The former ambassador was amazingly explicit in his testimony about the coup in Guatemala, a land best known to the outside world for coffee, bananas and the quetzal, which is both its national bird and the name of its monetary unit.

About 60 percent of Guatemala's population of 3,800,000 is Indian. The Indians are Mayas, descendants of the highly sophisticated culture that flourished a thousand years before the Spanish conquistadors came and ruled all of Central America from the Guatemalan city of Antigua. The rest of the population is of mixed Spanish and Indian descent. These are the ladinos. The Indians are largely illiterate; they provide a cheap labor force and have little communication with the ladinos.

Guatemala is a truly feudal state. About 2 percent of the population owns more than 70 percent of the land. For decades the most important two words in Guatemala have been la Frutera, the United Fruit Company. The American banana company owned and ran as a fiefdom hundreds of square miles of land in Bananera and Tiquisate. It was also a major stockholder in the country's railroad -- and a ready-made gringo political target.

When Arbenz took office in March, 1951, one of the first demands he faced came from coffee workers, who insisted that their minimum wages be doubled. This might seem unreasonable except for the fact that their pay was forty cents a day. The labor unions also demanded more for United Fruit's banana workers, who were paid $1.36 a day.

A bold student revolt had ousted Dictator Jorge Ubico in 1944. After that, President Juan Jose Arevalo, a socialist who turned violently anti-American, paved the way for Arbenz and the Communists.

Jacobo Arbenz Guzman, a professional Army officer, was the son of a Swiss father who migrated to Guatemala and became a druggist. (It was later rather widely whispered that Arbenz himself took drugs.) As President, Arbenz in 1952 tried to do something about the country's lopsided land ownership. He pushed through a land-reform program, but, predictably, it ended with small farmers, large finca owners and the United Fruit Company up in arms.

With his high-pitched voice and bad temper, Arbenz was no crowd-pleaser. And the students, always a powerful factor in Latin America, ridiculed him. The students had an annual lampooning parade, the Huelga de Dolores (grievance strike) of which Guatemalan officials lived in horror. Not long before Arbenz's fall from power, the students paraded by with a float that showed Uncle Sam poking a Guatemalan Indian lady with a banana; Arbenz and his hypodermic needle lurked behind a Russian bear, prodding the Guatemalan lady from the other direction. It about summed up the political situation.

For the bear was loose in the banana groves, all right. To maintain his power, Arbenz turned more and more to the Communists. Just as there is debate over whether Castro started out a Communist or became one later, there has been some dispute over the political evolution of Arbenz. But there is little dispute that by 1954 the Communists were running Guatemala. They had gained a foothold and a base in the hemisphere.

Arbenz made one fatal mistake, however. He trusted the Guatemalan Army, an essentially peace- loving organization little inclined to unnecessary strife and combat. Unlike Castro, Arbenz did not penetrate the Army politically, and when he needed it most, it turned on him. Late in the game he had placed spies, popularly known as orejas (the Ears), in various Army posts, but it was too late.

He made one other big mistake -- he expropriated 225,000 acres of United Fruit's best Pacific-slope holdings. Later the Arbenz regime charged that the United States had supported the Castillo-Armas invasion to protect la Frutera's $40,000,000 investment in Guatemala.

In the era of the Cold War, keeping Soviet power and influence out of the hemisphere, and particularly out of the Panama Canal area, was far more important to Washington than old-style banana diplomacy. But certainly the seizure of United Fruit's holdings without adequate compensation forced Eisenhower to take action. And it was one more indication of the direction things were taking in Guatemala.

Although a shipment of Czech arms to Guatemala in May, 1954, was later widely cited as the reason for the CIA-organized coup, the fact is that the machinery to topple Arbenz had been set in motion long before that.

Late in 1953 John Emil Peurifoy arrived on the scene. Peurifoy, known as "Smiling Jack" around the embassy in Guatemala (although not to his face), was a small-town boy from Walterboro, South Carolina, who had enjoyed a phenomenal rise in the State Department. This may not have been unrelated to the fact that his father was once an associate of the powerful James F. Byrnes, who was a senator at the time Peurifoy landed his first job with the State Department in 1938.

Peurifoy was proud of the fact that he once ran the Capitol elevator and equally proud of his small- town background. "Why, that town was so small," he was fond of saying, "you could drive right through it and not know you had been theah."

Beneath his courtly Old South exterior, Peurifoy was tough. He had been through hard times in the depression years. He quit West Point, knocked about the country for a while, became assistant manager and cashier of the Childs restaurant chain in New York, ran the elevator in Congress, watered plants at Washington's Botanical gardens and held a variety of other odd jobs before becoming a diplomat.

He never bothered to learn foreign languages, although in Guatemala he would occasionally wave to the crowd, smile and say "Amigo!" Fresh from Greece, where he had helped shore up that country after its war with the Communists, Peurifoy was just the man to have on the scene if there was to be trouble in the land of the quetzal bird.

And there was to be trouble. It was already brewing. Miguel Ydigoras Fuentes, who later became Guatemala's President, was in exile in El Salvador early in 1954. In his recent book, Ydigoras wrote:

"A former executive of the United Fruit Company, now retired, Mr. Walter Turnbull, came to see me with two gentlemen whom he introduced as agents of the CIA. They said that I was a popular figure in Guatemala and that they wanted to lend their assistance to overthrow Arbenz. When I asked their conditions for the assistance I found them unacceptable. Among other things, I was to promise to favor the United Fruit Company and the International Railways of Central America; to destroy the railroad workers labor union; ... to establish a strong-arm government, on the style of Ubico. Further, I was to pay back every cent that was invested in the undertaking." [3]

By late 1953 Eisenhower had reached his decision: Arbenz must go. To implement this decision, he turned to the CIA and Allen Dulles. A plan was evolved.

Peurifoy's assignment to Guatemala was part of it. Eisenhower's election had left Peurifoy without any political backing. His diplomatic career seemed over. The CIA went to Peurifoy and persuaded him to join the operation as Ambassador to Guatemala. At first, Peurifoy was leery of the idea, but a persuasive CIA official convinced him that the operation offered him his big chance to revitalize his career. Peurifoy said yes; the CIA arranged his ambassadorial appointment. In February, 1954, Eisenhower called in a former high United States diplomat to serve as a secret civilian adviser to the operation. The President had also asked his brother, Dr. Milton Eisenhower, to join the clandestine operation, but Milton, pleading his wife's serious illness at the time, did not participate.

Henry Holland, as the State Department Latin Chief, was privy to the operation. So were the Joint Chiefs of Staff. So was Senator Thruston B. Morton, then Assistant Secretary of State for Congressional Relations.

Although Dulles and his deputy, General Cabell, were in charge of the CIA's participation, the major immediate responsibility for carrying out the Guatemalan operation was placed in the hands of Frank G. Wisner, the Mississippi-born CIA deputy director for plans. (He was Bissell's predecessor.)

Wisner, a dedicated and hard-driving "black" operator, was an old hand in the intelligence business. In World War II he had been the OSS mission chief in Istanbul and Bucharest. He also worked for the OSS in Germany. After the war, commuting from his home in the suburbs to his Manhattan law firm, Carter, Ledyard & Milburn, seemed dull compared to the days of wartime intrigue along the Bosporus. On November 12, 1947, it was announced that Frank Wisner had been named Deputy Assistant Secretary of State.

Now, in Guatemala in 1954, what Wisner and the CIA needed was someone to serve as a leader of the coup and a focal point around which anti-Arbenz Guatemalans could rally. The man chosen was Colonel Carlos Castillo-Armas, a dapper, dedicated and ascetic-looking career officer who had tunneled his way out of prison to freedom after leading an unsuccessful revolt against Arbenz in 1950.

Castillo-Armas set up headquarters in Tegucigalpa, Honduras, and with the CIA's help, began plotting to return to his homeland. A onetime classmate of Arbenz at the Escuela Politecnica, Guatemala's military school, Castillo-Armas had spent two years just after World War II at the U.S. Army Command and General Staff School at Fort Leavenworth, Kansas.

The first evidence that the plot was afoot came on January 29, 1954, when Guatemala released intercepted correspondence between Castillo-Armas and Ydigoras.

The Guatemalan charges had a basis in fact, because the two exile leaders had been in touch and had signed a Pacto de Caballeros (gentlemen's agreement) at the border between El Salvador and Honduras. The pact provided that there would be a coup, and then free elections.

Guatemala charged that the plot was centered in Managua, the capital of Nicaragua, and enjoyed the support of President Anastasio Somoza and of General Rafael L. Trujillo, the dictator of the Dominican Republic. The Arbenz government also surmised that the "government of the North" had endorsed the plan.

It charged that the operation was known by the code name El Diablo (the Devil) and that training of rebels was going forward at El Tamarindo, President Somoza's plantation, at Puerto Cabezas (which became the air base for the Bay of Pigs operation seven years later) and on the island of Momotombito in Lake Managua.

The Guatemalan Government also charged that a "Colonel Carl T. Struder" who "was retired" from the U .S. Army, was training the sabotage teams. It said that arms were coming from H. F. Cordes & Company, in Hamburg, West Germany. State Department officials in Washington said they would not comment because that would "give the story a dignity it doesn't deserve."

But the training of Castillo-Armas' forces was in fact taking place on Momotombito, a volcanic island (actually the top of a volcano) which had earned its sonorous name from the sound the Indians thought it made when it rumbled. And "Tacho" Somoza, Nicaragua's President, was indeed heavily involved in the plans to overthrow Arbenz. In Nicaragua the training was directed by a CIA officer who went under the name of "Colonel Rutherford."

The most powerful military element in the coup was the CIA's air force. The handful of P-47 Thunderbolts and C-47 transports operated out of Managua International Airport. The pilots were Americans. The most dare-devil of these, as events later proved, was Jerry Fred DeLarm, a slim, short, hawk-featured man who liked to lay a .45 down on the table in front of him when talking to a stranger.

DeLarm, a native of San Francisco, was a barnstorming, adventurous flier well known in Central America. He had been flying in the area since he was nine, with his father, a pioneer pilot named Eddie DeLarm. Jerry DeLarm spoke Spanish fluently. When World War II broke out, he was flying in Panama City. During the war he shot down two Japanese Zeros over Saipan. He was discharged as a captain and shortly thereafter set up an airline in Costa Rica.

DeLarm's wife was related to Dr. Rafael Calderon-Guardia, the former President of Costa Rica. In 1948, when Otilio Ulate was elected President of that highly democratic nation, Calderon-Guardia tried to block him from taking office. In the revolt that followed, Jose Figueres battled Calderon- Guardia, and emerged as head of a victorious junta.

DeLarm fought on the losing side, for Calderon-Guardia. He flew a DC-3 rigged up with a machine gun in the co-pilot seat and another poking through the floor of the rear bathroom, for ground strafing.

After Costa Rica, DeLarm moved on to Guatemala. During the election of 1950 he took a job doing sky-writing and aerial broadcasts for Arbenz. He was promised $20,000 by the man he later helped to overthrow, and was understandably disturbed when the money did not come through after Arbenz won. That, DeLarm reflected later, was when he first began to suspect Arbenz was a Communist.

By 1954 DeLarm was flying for Castillo-Armas and the CIA. Until shortly before the invasion, he remained behind in Guatemala City, giving flying lessons and using this and an automobile dealership as cover. He had the code name "Rosebinda."

Meanwhile, events were moving in the public arena as well. John Foster Dulles and Henry Holland led the American delegation to the tenth Inter-American conference at Caracas in March. Dulles pushed for an anti-Communist resolution aimed squarely at Guatemala. Arbenz's foreign minister, Guillermo Toriello, angrily accused Foster Dulles of trying to create a "banana curtain." But the American resolution passed, seventeen to one, with Guatemala in opposition.

In May matters began moving to a climax. The CIA learned that a shipload of Czech arms, delivered through Poland, was on its way to Guatemala. The estimated 2,000 tons of rifles, machine guns and other armaments were aboard the Swedish freighter M/S Alfhem, en route from the Polish port of Stettin on the Baltic Sea.

The Alfhem operated out of Uddevalla, Sweden, and her owner was Angbats, Bohuslanska & Kusten, Inc. But Czech funds paid for a "straw charter" of the Alfhem, through the British firm of E. E. Dean in London. And the ship was taking a route to Guatemala as roundabout as its intricate charter arrangements. It sailed first to Dakar, then to Curacao, then to Honduras and finally to Puerto Barrios, on the east coast of Guatemala, where it docked on May 15.

The CIA had a difficult time tracking the arms ship across the vast Atlantic. At the time, it knew everything about the ship except its name: Alfhem. That made tracking difficult, since the freighter was playing hide-and-seek. Although the CIA had the help of the Navy, the agency lost the ship as it was going south along the African coast. It didn't catch up with the Alfhem until it turned up at dock side in Guatemala.

The State Department revealed the arms shipment on May 17. A week later the United States announced that as a countermeasure, it had begun shipping arms to Nicaragua in giant Globemaster planes. At least fifty tons of small arms and machine guns were flown in to "Tacho" Somoza.

But Eisenhower's efforts to get the Western Allies to join a quarantine on arms shipments to Guatemala met with less than a rousing success. The United States drew a protest from the Dutch when it searched the freighter Wulfbrook at San Juan, Puerto Rico. Britain refused to allow its ships to be searched.

On June 7, with the invasion date approaching rapidly, a strange event took place in Guatemala. It was disclosed that Ferdinand F. Schupp, identified as a "former deputy chief of the United States Air Force Mission" in Guatemala, had fled the country along with Colonel Rodolfo Mendoza Azurdia, the ex-chief of the Guatemalan Air Force.

The United States Embassy announced that Schupp had "resigned" his embassy post in 1952 to go into a "farming project" in southern Guatemala. Later, Schupp turned up in Guatemala City, like Jerry DeLarm, giving flying lessons. It is believed that Mendoza took off in a private plane on a seemingly routine flight and stopped off in a pasture to pick up Schupp. The two landed in El Salvador and asked for "asylum."

The CIA's air operation was drawing closer to readiness. Mendoza and Schupp had escaped to join it. A few days before Castillo-Armas crossed the border, DeLarm also slipped out of Guatemala, aboard a regular Pan American flight.

On June 8 Foster Dulles branded "totally false" Guatemalan charges that the United Fruit Company was at the heart of the dispute between Guatemala and Washington. Dulles said the Communist problem would remain even "if they gave a gold piece for every banana."

A couple of days before the invasion commenced the Secretary of State invited Thruston Morton to a White House meeting. As Assistant Secretary for Congressional Relations, Morton was aware of the CIA operation, since it had been his task to brief a few key senators about its true nature.

"You' d better come along," Secretary Dulles told Morton, "because if this thing blows up and goes wrong, you're going to have to straighten things out for us on the Hill."

Morton went along. The breakfast meeting with Eisenhower took place in the second-floor dining room of the White House. Eisenhower, the Dulles brothers, representatives of the Joint Chiefs of Staff and other aides were present, as Morton later recalled it. He said Eisenhower had asked the men around the table: "Are you sure this is going to succeed?"

Told that it would, Eisenhower responded:

"I'm prepared to take any steps that are necessary to see that it succeeds. For if it succeeds, it's the people of Guatemala throwing off the yoke of Communism. If it fails, the flag of the United States has failed."

It is generally agreed by the participants, however, that at no point in the invasion planning did Eisenhower ever discuss sending in United States armed forces should the CIA operation fail.

On June 18 Castillo-Armas and his small "Army of Liberation" crossed the border into Guatemala from Honduras. He drove in a battered station wagon, leading his men down the road to Esquipulas. Before dawn the P-47s had bombed San Jose, Guatemala's major port on the Pacific coast.

In Guatemala City the government announced the invasion had begun. In Washington the State Department said it had been in touch with Peurifoy. It added blandly: "The department has no evidence ... that this is anything other than a revolt of Guatemalans against the government."

Newsmen from all over the world converged on Guatemala and Honduras -- only to discover that there was no war to cover. Castillo-Armas and his Liberation Army settled down six miles over the border in Esquipulas, the site of the Church of the Black Christ, the country's major religious shrine. The strategy was to wait for the Arbenz regime to collapse. Then the invaders would march triumphantly into Guatemala City.

With the Army of Liberation bogged down just inside the Guatemalan border, "Tacho" Somoza decided to invite Ydigoras to lunch with him at the Presidential Palace in Managua to discuss the situation. "Tacho" introduced Ydigoras to "Colonel Rutherford," and added: "He is just back from Korea."

"Tacho" was standing in front of a map with pins in it showing the disposition of the Castillo-Armas columns. Four of the pins were in the shape of airplanes. The Nicaraguan President was bitterly complaining about how slowly the freedom forces were advancing.

"What kind of a crummy military school did Castillo Armas go to?" Somoza asked.

"The same one I did," Ydigoras replied mildly.

The most active of the planes represented by the pins on "Tacho's" map was that of DeLarm. On the first day of the invasion he dropped propaganda leaflets on Guatemala City, but had orders not to fire or drop any bombs. On subsequent raids on the capital, however, he bombed and strafed several targets, effectively demoralizing the government leaders.

The CIA's planes became known among the Guatemalan populace as Sulfatos -- the Guatemalan word for laxative -- because of the alleged effect their appearance had upon the Arbenz officials.

Then disaster struck the CIA's force of P-47s, when one was shot full of holes and another cracked up. On June 20 the Guatemalan Government charged in the UN that two American fliers had crash-landed in Tapachula, Mexico, after having bombed the Guatemalan city of Coban.*²

On the same day the Guatemalan Government was voicing its charge in the UN about American fliers, Henry Cabot Lodge, the United States Ambassador to the world organization, denied categorically that his government was behind the invasion.

"The situation does not involve aggression but is a revolt of Guatemalans against Guatemalans," he stated.

It was about this time that Allen Dulles mafe an urgent appeal for more airplanes. This led to the meeting of Eisenhower, Allen Dulles and Henry Holland, whose legalistic objections were overruled.

What Eisenhower did not say in his speech relating to this incident, is that the planes had to be "sold" by the U.S. Air Force to the government of Nicaragua in order to mask United States participation, which was surfacing at the UN. As cover for the transaction, Nicaragua had to put down $150,000 in cash to purchase the planes. After some interesting financial legerdemain, Nicaraguan Ambassador to Washington Guillermo Sevilla-Sacasa managed to come up with cover payment, and the new planes were dispatched to Nicaragua. Ultimately, it was CIA money that paid for them. The planes were flown down unarmed, to be armed upon arrival.

At one point during the trouble over the airplanes, General Cabell, the CIA deputy director, learned that one of the P-47s had been shipped to Nicaragua minus a landing-gear wheel. The plane could not operate without it. The U.S. Air Force rushed the part down and the Thunderbolt flew in the invasion.

On June 24, two days after the secret White House meeting, a P-47 swooped over Guatemala City, strafed gasoline stores and knocked out a radio station. It was not, as luck would have it, the Communist station, but a Protestant missionary station operated by Harold Yon Broekhoven, an evangelist from Passaic, New Jersey.

In New York, a spokesman for the United Fruit Company said that banana harvesting was at a standstill because of the war. He said they were keeping in close touch with the company manager in Guatemala City, Mr. Almyr Bump. The spokesman added confidently: "It is classical in these revolutionary movements down there that they confine themselves to national versus national, and Americans who stand on the sidelines and keep out of the way should be in no great danger."

American newsmen were certainly in no great danger. Castillo-Armas, as New York Herald Tribune correspondent Homer Bigart reported, clearly did not want them hanging around Esquipulas. Bigart had to retreat across the frontier to Nueva Ocotepeque, Honduras, which the newsmen referred to more conveniently as "New Octopus."

Defying the Army of Liberation ban, Evelyn Irons, a correspondent for the London Evening Standard, rented a mule and loped down the road to Esquipulas. There, Castillo-Armas stopped her. He would not allow her to proceed to the front, which had by now moved to Chiquimula. Nevertheless, Miss Irons had scooped her competitors, and mule prices in Nueva Ocotepeque soared.

But under the air attack, Arbenz was losing his nerve. The defection of Mendoza, the Air Force chief, was proving to be a key factor, because it demoralized the Guatemalan Air Force. It became so unreliable that Arbenz grounded his own planes.

At the front, Arbenz' reluctant Army commanders sent back messages saying that their forces were being overwhelmed by the invaders. It wasn't true, but it had a psychological effect on Arbenz. The CIA was reading the traffic from the front, and it knew what messages Arbenz was receiving. CIA clandestine radio operators intercepted the military communications and fed back false messages on the same wave length to further confuse the situation.

On June 25 a P-47 raided Guatemala City again. On June 27 Arbenz capitulated, following a long day of maneuvering by Peurifoy. The American ambassador first met at the palace with Foreign Minister Toriello. Then he conferred with Colonel Carlos Enrique Diaz, the chief of the Guatemalan armed forces, and a group of ranking colonels. By nightfall Arbenz was on the air broadcasting his resignation. Colonel Diaz became head of the junta that took over. He made an immediate tactical error.

Diaz, whose nickname was Pollo Triste (Sad Chicken), went on the air and announced: "The struggle against the mercenary invaders of Guatemala will not abate. Colonel Arbenz had done what he thought was his duty. I shall carry on."

This would never do. Diaz was operating on the radical assumption that it was his duty to fight when his country was invaded.

Peurifoy instantly recognized that this would be a disaster. If the junta, to which the State Department's ambassador had given at least his tacit blessing, went out to fight the CIA's Army of Liberation, it would be a fine spectacle. What would Henry Holland and Frank Wisner say?

Peurifoy put on a "siren" suit, strapped a .45 to his belt, and began maneuvering to topple Diaz. The CIA, which of course wanted Diaz out, nevertheless felt that Peurifoy was making himself entirely too conspicuous for the good of the operation.

The next day Jerry DeLarm bombed Guatemala City in earnest. He knocked out the radio station (the right one) and then dropped two bombs right in the middle of Fort Matamoros, the major installation of the Guatemalan Army.

That did it. Diaz, President for one day, was ousted at the point of machine guns (according to one account) by Colonel Elfego Monzon. With two other colonels, Monzon took over as head of a new, less bellicose junta, acceptable to Peurifoy.

The war was over.

But the CIA and the State Department were worried that it might break out again at any moment. Peace talks between Monzon and Castillo-Armas were scheduled to take place in El Salvador. Washington gave Peurifoy carte blanche to bring the junta and the CIA's Castillo-Armas together.

"They want me to go over there to El Salvador," Peurifoy confided to an aide, "and knock heads together."

With the Papal Nuncio, Monsignor Gennaro Verolino, the American ambassador flew off to El Salvador for the talks. On July 2, with tearful if cautious embraces, Monzon and Castillo-Armas signed a peace pact. It left Monzon top man, but only until the junta voted formally on a chief. The deal was signed in the Hall of Honor in the Presidential Palace. Castillo-Armas then flew back to Chiquimula to convince his followers that it was not a sellout to Monzon.

The next day Castillo-Armas came home to a huge welcome in Guatemala City. He arrived not at the head of his conquering troops, however, but in Peurifoy's embassy plane.

Meanwhile John Foster Dulles addressed the United States on radio and television. He said the struggle in Guatemala exposed the "evil purpose of the Kremlin" to find "nesting places" in the Americas and added:

"Led by Colonel Castillo-Armas, patriots arose in Guatemala to challenge the Communist leadership -- and to change it. Thus the situation is being cured by the Guatemalans themselves." [4]

If the CIA's coup had routed Communism in Guatemala, democracy is not what followed in its wake. As its first act, the ruling junta canceled the right of illiterates to vote, thereby disenfranchising in one stroke about 70 percent of Guatemala's population -- almost all the Indians.

The junta elected Castillo-Armas as its President on July 8. In August the liberator suspended all constitutional guarantees. The ideological basis of the coup was further undercut when the chief CIA man in Guatemala quit the agency and went into the cement business there. The free election Castillo-Armas had promised when Arbenz fell turned out to be "si" or "no" vote on whether to continue Castillo-Armas as President. Castillo-Armas won.

In rapid succession, the new regime set up a Robespierre-like Committee for Defense Against Communism with sweeping police-state powers. The government took back 800,000 acres of land from the peasants, returned to United Fruit the land Arbenz had seized, and repealed amendments to a 1947 law that had guaranteed rights to workers and labor unions.

Within a week of Castillo-Arrnas' election as head of the junta, the new government announced it had arrested 4,000 persons on suspicion of Communist activity. By August it had passed the Preventive Penal Law Against Communism. This set up the Defense Committee, which met in secret and could declare anyone a Communist with no right of appeal.

Those registered by the committee could be arbitrarily arrested for periods up to six months; they could not own radios or hold public office. Within four months the new government had registered 72,000 persons as Communists or sympathizers. A committee official said it was aiming for 200,000.

Castillo-Armas was generally regarded as an honest, proud and rather simple man who genuinely loved his country. But he had a covey of advisers, and some of them were less dedicated than their chief. After the 1954 coup American gambler types began drifting into Guatemala, and certain of the liberator's lieutenants were cut in. Castillo-Armas could not bring himself to realize that some of his followers were treacherous. A gambling casino was built in which various Army officers shared a heavy financial interest with the Americans.

Castillo-Armas closed down the casino, and shortly afterward, on July 26, 1957, he was assassinated by a member of the palace guard. The crime was first blamed on Communists, then on Castillo-Armas' enemies within the government. It has never been solved.

The following year, Ydigoras was elected President and settled down for a term that was at least never dull. At one point, when rumors of official corruption were rife, he went on television with his ministers. Like a schoolteacher, Ydigoras went down the line, saying, "Now, Mr. Minister, you wouldn't steal from the treasury, would you?" One by one, the ministers said no, they certainly would not.

Another time, a newspaperman accused Ydigoras of being a viejo enclenque, or enfeebled old man. Ydigoras went on television again, repeated the charge and said: "I will show him." Then he proceeded to skip rope and juggle Indian clubs before the amazed Guatemalan audience.

Still, Ydigoras was nobody's fool. When the CIA came to him in 1960 asking for Guatemalan bases for the Bay of Pigs training, he said yes -- although fully aware that he was risking his political neck. In fact, the November, 1960, uprising (which CIA pilots helped to put down) was partly blamed on the issue of the Cuban training bases in Guatemala.

On March 31, 1963, Ydigoras was ousted by Colonel Enrique Peralta in one of the first of a series of military coups in Latin America that threatened to make a mockery of the political reforms at the base of the Alliance for Progress. Colonel Peralta's regime was recognized by Washington in less than three weeks.

If any efforts were made by Washington to save the legally elected Ydigoras government -- which had risked its future to provide bases for the CIA for the Cuban invasion -- they were certainly not effective. There is, in fact, no available evidence that any such efforts were made.

And so, a decade after the CIA's liberation of Guatemala from Communism in 1954, the lot of Guatemalans was about the same. The finca owners prospered. The 2,000,000 Indians, still largely illiterate, toiled on for wages still ridiculously low. (Eighty cents a day is considered generous in many areas of the country.) And another military junta was in the saddle.

As is so often the case, the Invisible Government had moved in, accomplished its task, and moved on. The yoke of Communism had been thrown off but in its place there remained the yoke of poverty and an indifferent oligarchy. The abysmal conditions that led to Arbenz in the first place were as apparent as ever.


*¹ Henry Holland, the State Department's representative at the meeting.

*² That same day William A. Beall, a thirty-year-old American flier from Tyler, Texas, showed up in Mexico City saying he had crash-landed his plane in the Pacific Ocean off Guatemala two days before. He had flown to Mexico City from Tapachula. Beall said two other American fliers had crashed off Guatemala a few days earlier, but had been rescued "by the United States Navy."

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THE KENNEDY SHAKE-UP

THE CIA emerged from the coup in Guatemala with a reputation in the Invisible Government as a clever and efficient operator in Latin American affairs. And despite the agency's subsequent difficulties in other areas of the world, that reputation was essentially untarnished when President Kennedy took office in January of 1961.

When the invasion failed, however, a sharp reaction set in. A few days after the Bay of Pigs, President Kennedy called in Clark M. Clifford, a Washington lawyer and close confidant who later became the chairman of the President's Foreign Intelligence Advisory Board. Kennedy complained that he had been given bad information and bad advice by his intelligence and military advisers.

"I was in the Pacific," said the ex-PT boat skipper. "I know something about these things. How could they have put all the ammunition in one ship or two ships?"

Referring to the Joint Chiefs of Staff, the President told another visitor: "They don't know any more about it than anyone else." He vowed to shake the intelligence community from top to bottom. He was determined that the Bay of Pigs would not happen again. "One more," he stated ruefully, "will sink me."

The President then set out to gain control of the intelligence establishment and to make it genuinely submissive to his ideas and purposes. As a first order of business, he decided to conduct an extensive investigation of the Cuban debacle.

"We intend to profit from this lesson," he told the American Society of Newspaper Editors on April 20, the day after the invasion collapsed. "We intend to re-examine and reorient our forces of all kinds -- our tactics and our institutions here in this community. We intend to intensify our efforts for a struggle in many ways more difficult than war."

At his news conference the next day, the President declined to get into details about the Bay of Pigs on the grounds that it would not "aid the interest of the United States." But he denied any desire to "conceal responsibility ... I'm the responsible officer of the government," Kennedy declared, "and that is quite obvious."

But in this moment of extreme political vulnerability, high administration officials began to point out in private post-mortems with reporters that Kennedy had inherited the Bay of Pigs idea from President Eisenhower.

On April 23, Interior Secretary Stewart L. Udall made the mistake of giving public voice to the administration line, and the Republicans, predictably, pounced upon him.

"Here was a plan conceived by one administration," Udall declared. "This from all I can find out began over a year ago and President Eisenhower directed it."

"Cheap and vicious partisanship," retorted Richard M. Nixon.

Kennedy stepped in quickly the next day to prevent all-out political war. He told Pierre Salinger to issue a public statement.

"President Kennedy has stated from the beginning," Salinger declared, "that as President he bears sole responsibility for the events of the past days. He has stated on all occasions, and he restates it now, so it will be understood by all. The President is strongly opposed to anyone within or without the administration attempting to shift the responsibility."

Kennedy's full public acceptance of the blame seemed to be the Republicans' price for laying off the Cuban issue, at least temporarily. In the week after the invasion, the President discussed the operation at length with Eisenhower, Nixon, Senator Barry M. Goldwater of Arizona and Governor Nelson A. Rockefeller of New York. Eisenhower set the Republican line on emerging from an eighty-five-minute conversation with Kennedy at Camp David on April 22.

"I am all in favor," Eisenhower declared, "of the United States supporting the man who has to carry the responsibility for our foreign affairs."

Kennedy used the momentary truce to set in motion a sweeping reorganization of the Invisible Government. Even before the Bay of Pigs, he had planned a major shake-up in the hierarchy of the CIA. He had indicated to several high-ranking officials that he would put Richard Bissell in charge of the agency when Dulles stepped down.

Now, in the shadow of the Cuban fiasco, it was clear that Bissell would have to go and that the shake-up would have to be deferred for a decent interval. Dulles' resignation was not accepted until September 27, 1961. He was succeeded on November 29, 1961 by John McCone. General Cabell retired as the deputy director on January 31, 1962. He was replaced by Army Major General Marshall Sylvester Carter,*¹ fifty-two.

Bissell resigned as the deputy director for plans on February 17, 1962. He was succeeded by his assistant, Richard M. Helms, forty-eight. Robert Amory, the deputy director for intelligence, was shifted to the Budget Bureau to become the director of its International Division. He was replaced on May 16, 1962 by Ray S. Cline, forty-four.

The top-level shake-up at the CIA was not completed until a full year had passed. But two days after the invasion Kennedy ordered General Maxwell Taylor to head an investigation and to make recommendations for the reform of the intelligence community.

Taylor was a World War II paratroop commander who quit as Army Chief of Staff in 1959 in protest against the refusal of the Eisenhower Administration to adopt his views on conventional warfare. After the Bay of Pigs investigation, he became Kennedy's personal military adviser and, finally, the chairman of the Joint Chiefs of Staff.

Joining Taylor in the investigation were Robert Kennedy, Allen Dulles and Arleigh Burke. It was clear that the Attorney General was to become the untitled overseer of the intelligence apparatus in the Kennedy Administration. The appointment of Dulles and Burke, holdovers from the Eisenhower Administration, was designed to gather broad political support for the shake-up and to forestall suggestions that a whitewash operation was afoot.

Kennedy moved to take an even tighter grip on the Invisible Government on May 4 when he revived the President's Board of Consultants on Foreign Intelligence Activities under a new title, the President's Foreign Intelligence Advisory Board. The original group had been set up by President Eisenhower on January 13, 1956, on a recommendation by the Hoover Commission. It was headed by James R. Killian, Jr., the president of the Massachusetts Institute of Technology. Joseph P. Kennedy, the President's father, served on it for the first six months.

The board had disbanded on January 7, 1961, when the entire membership resigned in anticipation of the new administration. But now Kennedy called it back into existence, again under the chairmanship of Killian. *²

The President's instructions to the new board were to investigate the entire intelligence community, to recommend detailed changes and to make sure that the changes were carried out. The original board had met just twice a year and had been only marginally informed about intelligence activities. Kennedy ordered the new board to meet six to eight times a year and, between times, to carry out specific assignments for him at home and abroad.

The Killian and Taylor groups had scarcely begun their secret inquiries before the tenuous political truce on the Bay of Pigs began to be breached. On June 11, 1961, William E. Miller, the New York congressman and the chairman of the Republican National Committee, charged that the invasion had failed because Kennedy "rescinded and revoked the Eisenhower plan to have the Cuban freedom fighters protected by American air power."

Miller said his accusation was based on comments by Eisenhower to a group of Republican leaders. But the former President corrected him the very next day. Eisenhower denied that American air power had been approved during his time in office. He had merely stated, the general explained, that an amphibious operation could not succeed without air support of some kind.

This was the first of many confusing exchanges during the following weeks and months on the issue of air cover. Republican and Cuban exile leaders charged repeatedly that the Bay of Pigs invasion failed because President Kennedy withdrew American air cover.

The Kennedy Administration held its tongue for close to two years. But finally, in January of 1963, Robert Kennedy denied the accusation in interviews with the Miami Herald and U.S. News & World Report.

"I can say unequivocally," he declared, "that President Kennedy never withdrew U.S. air cover. ... There never were any plans made for U.S. air cover, so there was nothing to withdraw ..." [1]

And again: "There never was any promise. Not even under Mr. Eisenhower was American air cover in the picture." [2]

The air-cover controversy had grown out of a massive confusion over what was included in the original air plan for the Bay of Pigs. As we have seen in earlier chapters, the original plan envisioned no need for the direct intervention of U. S. Navy or Air Force planes. Castro's air force was to have been destroyed on the ground by the CIA's Cuban exile bombers. In that event, the Cuban invaders logically would not have required aerial protection against nonexistent planes. But the President canceled the second strike against Castro's air bases. Accordingly, Castro's planes were in the air to harass the invaders on the beach and to sink the ships carrying their equipment, ammunition, fuel and communications.

The real question in the controversy is whether the invasion could have succeeded if Kennedy had not canceled the second strike. The Taylor group grappled with this question but failed to reach agreement.

Taylor and Robert Kennedy concluded that the invasion plan had been thoroughly faulty and stood no chance of success in any event. "It simply cannot be said," the Attorney General later commented, "that the invasion failed because of any single factor. There were several major mistakes. It was just a bad plan. Victory was never close." [3]

Burke, on the other hand, took the position that the invasion very nearly succeeded, and probably would have if the President had not canceled the second air strike. The invasion might have worked without air support of any kind, the admiral argued, if the first air strike had not been scheduled two days in advance of the landing eliminating the element of surprise.

Dulles took a position somewhere in between. He thought success could have been achieved if all had gone according to plan (he had left Washington for San Juan at the time of the invasion with no idea that the plan would be changed). But Dulles felt the CIA and the Joint Chiefs made a mistake in not arranging for alternatives in case the second strike failed or did not come off. He thought there should have been a contingency plan to make sure the invaders got ashore with their equipment.

The Taylor committee presented its views, secretly and orally, to President Kennedy in the summer of 1961. *³ The committee had worked for about four months, meeting secretly at the Pentagon in an office close to the Joint Chiefs' area. The group interviewed virtually everyone of significance in the Bay of Pigs invasion, including the CIA man who directed the air operations and Mario Zuniga, the Cuban Pilot who told the cover story about defecting from Castro's air force.

The committee reached more than thirty conclusions, including findings that communications were very bad and that there was an overcentralization of the operation in Washington. They also reached a meeting of minds on another crucial point. After the Bay of Pigs, there was considerable pressure within and without the government to limit the CIA to intelligence-gathering alone. It was argued that the agency was inevitably tempted to warp its intelligence estimates to justify its pet projects; and that it would be better to transfer responsibility for all clandestine operations to some other agency, possibly the Pentagon.

This argument was strenuously opposed by Dulles and Cabell. They contended that a separation of intelligence-gathering from operations would result in expensive duplication of personnel and facilities, particularly at overseas posts. They also warned that foreign agents would tend to play off one branch of the spy apparatus against the other, bidding up the price of information and confusing the evidence.

Dulles pleaded that, contrary to popular belief, no intelligence agency in the world is split into separate information-gathering and operational units. When the British set up a Special Operations Executive in World War II, he maintained, they ran into serious difficulties and had to revert to a CIA-type system.

These pleadings proved persuasive to the Taylor committee, which declined to recommend that all clandestine operations be divorced from the CIA's responsibilities. The President agreed and the CIA continued to function essentially in its old ways.

However, the Taylor group did come to the conclusion that the Bay of Pigs operation was too large and too unwieldy to have been conducted by the CIA. In the future, the CIA was to be limited to operations requiring military equipment no larger or more complex than side arms -- weapons which could be carried by individuals. In other words, the CIA was never again to direct operations involving aircraft, tanks or amphibious ships. Operations of that size were to be conducted by the Pentagon.

Put another way, the CIA was henceforth to be restricted to paramilitary operations which would be "plausibly deniable." The Bay of Pigs invasion was not plausibly deniable because it was too large and pervasive to escape the notice of alert officials, newspapermen and private citizens in a free society.

It is clear from all this that the leaders of the government had finally come to the realization that certain types of clandestine operations are incompatible with the democratic system. In a totalitarian society, where the organs of communication are tightly controlled, secret ventures can be mounted on a large scale with minimum risk of disclosure. But this is extremely difficult in an open society in which freedom of speech and the press is constitutionally guaranteed.

As Robert Kennedy emphasized, President Kennedy canceled the second air strike because "U.S. participation in the matter was coming to the surface ... contrary to the pre-invasion plan." [4]

It had been expected that Mario Zuniga would get away with the tale of defection he told in Miami on the Saturday before the invasion. But a few influential newspapers and UN delegates began to express skepticism and the President felt compelled to change the military plan in an effort to conceal the fact that the United States was behind the invasion.

Immediately after the invasion failed, the President revealed his concern about the limitations imposed upon the government by the institutions of free speech and a free press. He went before the American Newspaper Publishers Association on April 27, 1961, with a plea for voluntary censorship.

"If the press is awaiting a declaration of war before it imposes the self-discipline of combat conditions," Kennedy remarked, "then I can only say that no war has ever posed a greater threat to our security."

But despite his chagrin and his momentary impatience with the workings of a democracy, the President had not lost perspective on the dangers of toying with fundamental freedoms.

"The very word 'secrecy' is repugnant in a free and open republic," he declared, "and we are as a people inherently and historically opposed to secret societies, to secret oaths and to secret proceedings. We decided long ago that the dangers of excessive and unwarranted concealment of pertinent facts far outweighed the dangers which are cited to justify it. Even today, there is little value in opposing the threat of a closed society by imitating its arbitrary restrictions. Even today, there is little value in insuring the survival of our nation if our traditions do not survive with it."

*¹ In the Spring of 1965, President Johnson shifted Carter to be director of the National Security Agency and named Helms his successor at CIA. In June, 1966, Helms moved up again to the top spot of director of CIA.

*² The new members were Frank Pace, Jr., former Secretary of the Army; Dr. Edwin H. Land, president of the Polaroid Corporation; Dr. William O. Baker, vice-president for research of the Bell Telephone Laboratories; Lieutenant General James H. Doolittle, retired, board chairman of Space Technology Laboratories, Inc.; Dr. William L. Langer, professor of history, Harvard University; Robert D. Murphy, former Under Secretary of State and president of Corning Glass International; Gordon Gray, former head of the Office of Defense Mobilization; and Clark Clifford, who had been a leading adviser to President Truman. Clifford succeeded Killian as chairman on April 23, 1963.

*³ Late in 1962 the administration's findings were drawn up in a White Paper, prepared mainly by Roger Hilsman, then the State Department's director of intelligence and research. At the White House, Bundy and Salinger recommended that it be released to the public in January, 1963. But Robert Kennedy urged that it remain secret, and the White Paper was not released.

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THE SECRET ELITE

THE MOST controversial of President Kennedy's moves to reorganize the Invisible Government was his appointment of John McCone as Director of Central Intelligence. The strong-willed, stern-looking multimillionaire was not of the stuff to inspire love among the bureaucrats.

"When he smiles," a CIA man cautioned, "look out."

McCone had aroused much fear and antagonism in his rise to the top in the world of business and government. Influential scientists were outraged by what they believed was an effort by McCone to have ten of their brethren fired from the California Institute of Technology in 1956.

The Caltech scientists had come out in support of Adlai Stevenson's proposal for a nuclear test ban during the presidential campaign that year. And McCone, a trustee of the Institute, retorted by accusing the scientists of being "taken in" by Soviet propaganda and of attempting to "create fear in the minds of the uninformed that radioactive fallout from H-bomb tests endangers life."

McCone denied that he had attempted to have the scientists dismissed. [1] But some remained unconvinced and still more were embittered by the blunt language of McCone's denunciation.

Outside the scientific community, many were disturbed by McCone's big wartime profits in the ship-building business. Ralph E. Casey of the General Accounting Office, a watchdog arm of the Congress, testified in 1946 that Mc Cone and his associates in the California Shipbuilding Company made $44,000,000 on an investment of $100,000.

"I daresay ... Casey remarked, "that at no time in the history of American business, whether in wartime or in peacetime, have so few men made so much money with so little risk and all at the expense of the taxpayers, not only of this generation but of generations to come." [2]

Again. McCone denied the accusation. He insisted that the investment of California Shipbuilding -- including loans, bank credits and stock, in addition to the cash -- amounted to over $7,000,000. He also disputed Casey's profit figures as inflated.*¹ In any event, he testified, the government got back 95 percent of the profits in taxes. [3]

Another of McCone's business activities which provoked opposition was his long relationship with the international oil industry. During the Senate Armed Services Committee hearings on his nomination in January, 1962, McCone told of his former directorship of the Panama Pacific Tankers Company, a large oil-carrying fleet, and of the $1,000,000 in stock he held in Standard Oil of California, which operates extensively in the Middle East, Indonesia and Latin America.

"Every well-informed American knows," commented Senator Joseph Clark, the Pennsylvania Democrat, "that the American oil companies are deep in the politics of the Middle East ... [and] the CIA is deep in the politics of the Middle East." [4]

Clark opposed McCone's appointment on the ground that his ownership of the oil stock amounted to "a legal violation and a very unwise holding." McCone offered to dispose of the stock but the committee refused to consider it. From the tenor of the questioning it was clear that the great majority of senators was not at all disturbed by McCone's record. They were, in fact, abundantly impressed.

"I have not had the opportunity of knowing Mr. McCone well, only through reputation," said Senator Strom Thurmond, the South Carolina Democrat, "but in looking over this biography, to me it epitomizes what has made America great."

The biography showed that McCone was born into a prosperous San Francisco family on January 4, 1902. He was graduated magna cum laude from the University of California with an engineering degree in 1922. That year he joined the Llewellyn Iron Works in California and, before moving into the executive suite, served briefly as a riveter, a surveyor, a foreman and a construction manager. When Llewellyn merged into the Consolidated Steel Corporation in 1929, McCone assumed a series of executive positions, including vice-president in charge of sales. In 1933 he became an executive vice-president and director.

McCone left the steel business in 1937 to form a new engineering concern, the Bechtel-McCone- Parsons Corporation of Los Angeles. This firm specialized in the design and construction of petroleum refineries, processing plants and power plants for installation in the United States, South America and the Middle East.

In 1939. when war broke out in Europe, McCone joined the Six Companies Group in the formation of the Seattle-Tacoma Corporation which built merchant ships for the U.S. Maritime Commission and the British Government. During the war McCone and his enterprises were also active in the modification of Air Force bombers for combat.

After the war McCone took over the Joshua Hendy Iron Works at Sunnyvale, California, and broadened his business interests in a dozen major corporations, including the Curtiss-Wright Corporation, Standard Oil of California and Trans World Airlines. He entered government service in 1947 as a member of President Truman's Air Policy Commission. In 1948 he became special deputy to James Forrestal, the Secretary of Defense. He prepared the first two budgets of the newly unified Defense Department and worked closely with Forrestal in his efforts to create the CIA.

McCone was named Under Secretary of the Air Force in 1950. He returned to private life the next year, but was back in the government in 1958 as the chairman of the Atomic Energy Commission. He served in that post until the end of the Eisenhower Administration.

During his government service, McCone gained a reputation as an uncompromising supporter of John Foster Dulles' doctrine of massive retaliation, the Air Force's atomic warfare theories, and the hard-line strategy against the Soviet Union.

A member of the Roman Catholic Church, McCone was designated by Pope Pius XII as a Knight of St. Gregory and awarded the Grand Cross of the Order of St. Sylvester. He and Clare Booth Luce served as Eisenhower's official representatives at Pope Pius' funeral in 1958.

These credentials -- particularly McCone's reputation as a hard-nosed executive who could get things done quickly and efficiently -- impressed Robert Kennedy, who had been looking around for a successor to Allen Dulles.

There had been some thought that the Attorney General might take the job himself, but this inevitably would have provoked Republican charges that the Kennedys were creating a dynasty. And it probably would have stirred up new demands for tighter Congressional control of the CIA -- a prospect which the President did not relish.

Serious consideration was given to the possibility of offering the job to Clark Clifford, who had impressed Kennedy mightily when he directed the change-over in the White House staff between administrations. But the handsome and prosperous Washington lawyer was not interested.

The President then turned to Fowler Hamilton, a Wall Street lawyer and close friend of Senator Symington. The White House was on the verge of announcing Hamilton's appointment when Kennedy encountered a series of difficulties in finding a director for the Agency for International Development (AID).

The foreign-aid job had been scheduled to go to George D. Woods, the board chairman of the First Boston Company. But Woods felt compelled to withdraw his name because of renewed talk about First Boston's implication in the Dixon Yates scandal. Kennedy then tried to fill the AID opening with Thomas J. Watson. Jr., the president of the International Business Machines Corporation. But Watson said no and the President named Hamilton as the AID director.

It was then that Kennedy decided upon McCone as Director of Central Intelligence. The decision, announced on September 27, 1961, shocked official Washington. The members of the President's Foreign Intelligence Advisory Board were stunned that Kennedy had not asked their advice in advance of the appointment; and there were further grumblings over the Caltech incident and McCone's close ties with the Republican Party.

"I think," a board member was heard to comment, "that the President should have got a Kennedy man."

But that, of course, was precisely what the President did not want. After the Bay of Pigs, both Kennedy and the CIA were extremely vulnerable to political attack from the Republicans, particularly from the right wing of the party. With a conservative Republican at the head of the Invisible Government, the President, clearly, thought the political fire would be somewhat diverted.

"You are now living on the bull's eye," Kennedy said as McCone was sworn into office on November 29, 1961, "and I welcome you to that spot."

A week later, on December 6, McCone's wife died unexpectedly of a heart attack. They had been married for twenty-three years and were unusually close. McCone was grief-stricken. Allen Dulles volunteered to take care of the arrangements for flying the body back to the West Coast. On the way to the airport, McCone poured out his anguish.

"I can't go on," he told his predecessor. "I'm going to have to tell the President that I can't take the job."

"You must." Dulles replied firmly. "You owe it to the country."

McCone followed Dulles' advice and set out almost immediately on extensive tours of agency installations in Europe and Asia. His nomination came to a vote in the Senate on January 31, 1962, after a brief, bitter debate, and he was confirmed seventy-one to twelve. *² Two weeks earlier, on January 16, the President had outlined the new responsibilities of the Director of Central Intelligence in a letter to McCone:

It is my wish that you serve as the government's principal foreign intelligence officer and that you undertake as an integral part of your responsibility, the coordination and effective guidance of the total U.S. intelligence effort ...

As head of the Central Intelligence Agency, while you will continue to have overall responsibility for the agency, I shall expect you to delegate to your principal deputy, as you may deem necessary, so much of the direction of the detailed operation of the agency as may be required to permit you to carry out your primary task as director of Central Intelligence.

The President noted "with approval" that McCone had designated his deputy, General Carter, to sit on the United States Intelligence Board (USIB) as the CIA's representative.

"Pat" Carter had risen in the Army as a staff man. A graduate of West Point and the Massachusetts Institute of Technology, he became a close aide to General George C. Marshall in World War II. He gained experience in international affairs as an important military figure at several wartime and postwar conferences, including the World War II summit meeting in Cairo in 1943.

Despite the broadened powers implied in the President's letter, Carter had no illusions about his position in the CIA. Kennedy had wanted to put a civilian in the deputy's job and settled upon Carter only under strong Congressional pressure for the appointment of another military man. When some of Carter's old military friends would arrive at the CIA from the Pentagon for an intelligence briefing, the general left no doubt as to who was the real boss of the agency. "Welcome," he would say, "to McConey Island."

As Director of Central Intelligence. McCone was responsible not only for the CIA but also for all of the other government agencies involved in intelligence work. McCone directed the intelligence community formally through USIB, a committee of intelligence agency representatives, which was called into session each week in a room adjacent to his top-floor office in the CIA's new building in Langley, Virginia.

McCone also maintained informal supervisory contact with the principal members of the intelligence community: Army Intelligence, the Office of Naval Intelligence, Air Force Intelligence, the Atomic Energy Commission, the Federal Bureau of Investigation, the State Department's Bureau of Intelligence and Research, the National Security Agency, the Defense Intelligence Agency, as well as the CIA.
 

Army Intelligence
The Army G-2 is the oldest of the nation's intelligence services, with a tradition dating back to World War I. In World War II it carried off several coups: the capture intact of a high-level Nazi planning group in North Africa; the advance seizure of a map of all enemy mines in Sicily; and the capture of the entire Japanese secret-police force on Okinawa. On a bureaucratic level, it did battle with the OSS and the ambitious intelligence men of the Army Air Corps. After the war the G-2 absorbed many of the OSS operatives under a directive by President Truman.

But it lost air intelligence when the Air Force was created as a separate service. The Army yielded further ground after the formation of the DIA, but retained four vital functions:

( 1) technical intelligence on the types, quantity and quality of army weapons of foreign powers;

( 2) the attache system, which tries to estimate the size, organization and deployment of foreign armies through the efforts -- mainly overt -- of Army representatives in the major United States embassies;

( 3) the Counter Intelligence Corps, which is charged with detecting and preventing treason, espionage, sabotage, gambling, prostitution and black marketeering;

( 4) the Army Map Service, which is responsible for meeting most of the government's mapping needs.

Office of Naval Intelligence
The ONI is the smallest of the intelligence branches of the three services. Its total complement amounted to 2,600 men in 1961.*³ and the number has undoubtedly declined as the DIA has absorbed more and more of the service intelligence functions. The Navy maintains no separate counter-intelligence unit such as the Army's CIC.

But it makes use of an attache system, and it deploys intelligence men at all of its installations, ashore and afloat. The principal mission of the ONI is to collect information on foreign naval forces. It keeps a special weather eye on the Soviet submarine fleet and compiles elaborate dossiers on the world's major beaches, harbors and ports.


Air Force Intelligence
The A-2 is the most mechanically sophisticated of the service intelligence operations. It employs the latest electronic gear to determine the missile, bomber, satellite and radar potential of the Soviet Union. The Electronics Division, through its Reconnaissance, Equipment and Control Branches, gathers the electronic intelligence (a separate chapter will deal with the startling advances that have been made in this field).

Under a Pentagon directive in 1961, the Air Force controls all reconnaissance satellites orbiting the Soviet Union. A Target Division is responsible for sorting out the intelligence intake and maintaining a current list of potential enemy targets. It also compiles and publishes the Bombing Encyclopedia, a compendium of target information.

The A-2 conducts a world-wide attaché system through its International Liaison Division. It also maintains a Military Capabilities Branch and a Wargame Branch in the Threat Assessments Division of its Directorate of Warning and Threat Assessments.
 

Atomic Energy Commission
The AEC is responsible for making estimates of the atomic-weapons capabilities of the Soviet Union and other nuclear powers. Since 1948 the United States has maintained round-the-clock monitoring of the atmosphere to detect radioactive particles from atomic tests. Samples are collected by the U-2 and other high-flying aircraft.

From an analysis of the samples, the AEC can determine not only the fact that atomic explosions have taken place but also the type and power of the weapons detonated. The AEC also plays an important role in assessing test-ban proposals. It carries out intensive experimentation in ways to shield atomic explosions from detection and ways to pierce the shielding devised by other nations.

Because of the law which set it up and its close relationship to the Joint Committee on Atomic Energy in the Congress, the AEC is one of the most independent branches of the Invisible Government. One of Eisenhower's parting admonitions to Kennedy was: "You may be able to run lots of things around here. But one of them you can't run is the AEC."


Federal Bureau of Investigation
As the investigative arm of the Department of Justice, the FBI is responsible, among its other duties, for catching spies. In this phase of its work --as opposed to its conventional criminal investigations -- the FBI is an intelligence agency, and as such, part of the Invisible Government. The assistant to J. Edgar Hoover, the FBI director sits on USIB, and the FBI has a liaison man who reports to work at the CIA headquarters in Langley every day.

Actual counter-espionage work is conducted by the FBI's hush-hush division Number 5. This is the Domestic Intelligence Division, headed by William C. Sullivan. It is in charge of espionage, sabotage and subversion cases.

In Miami, New York and Washington, there are FBI agents permanently assigned to counter-espionage. A squad supervisor is assigned to intelligence in each of the FBI's fifty-five field offices in the United States. Agents who normally conduct ordinary criminal investigations are assigned to espionage cases when necessary.

About 20 percent of the 650,000 cases investigated by the FBI in 1963 were espionage -- internal security cases, although the exact figure is classified.

"Over the years," Hoover told a House committee in 1962, "no phase of American activity has been immune to Soviet-bloc intelligence attempts. The Soviets have attempted to obtain every conceivable type of information. The targets have been all-encompassing and have included aerial photographs, maps and charts of our major cities and vital areas, data regarding the organization of our military services and their training programs, technical classified and unclassified information concerning nuclear weapons, planes, ships and submarines. Of prime interest to the Soviets is information concerning U.S. military bases, including missile sites and radar installations.

"They have probed to penetrate our most critical intelligence and counter-intelligence organizations." [5]

Although Hoover did not say so, some of these penetration attempts are controlled by "Department Nine" of the KGB. This is the division of the Soviet secret police that keeps dossiers on Russian emigres.

The FBI exposed one "Department Nine" operation in Washington in 1963. It began on April 6 of that year, when a Soviet citizen arrived in the United States with papers identifying him as "Vladimir Gridnev," forty-nine, a temporary employee of the Soviet Embassy.

It was a false name. "Gridnev" was actually brought here by the KGB to try to recruit his brother, a Soviet defector employed by the CIA.

The first move in the game was made at 9:00 P.M. on April 28, when the defector returned from work to his home in an apartment house in a Virginia suburb of the capital. As he reached for his key, a voice behind him whispered his name. He turned to find his brother, Volodya, whom he had not seen for twenty-three years, and who had entered the country as "Gridnev."

They embraced and went inside to a third-floor apartment. A few moments later, there was a knock on the door. A Russian whom Volodya introduced as "Ivan Ivanovich ... his embassy "driver," entered the room. He was actually Gennadiy Sevastyanov, a thirty-three-year-old Russian agent working under diplomatic cover as an attache in the cultural division of the Soviet Embassy.

Two days later Volodya met his brother again at a bus stop in Arlington, Virginia. Sevastyanov joined them. The entire scene was filmed by the FBI with a sixteen-millimeter movie camera. The three men drove to a restaurant, where Volodya tried to persuade his brother to stay at the CIA but to work for the Russians.

Sevastyanov made the same proposal, and promised that later on he could return to his homeland and be well taken care of. On May 2 the three met once more. Sevastyanov gave the CIA man a password and other instructions for clandestine meetings. Volodya was allowed to return to the Soviet Union on May 4 -- since he was regarded by the FBI as a helpless pawn in the Soviet operation. Sevastyanov and Volodya's brother met once more on June 13.

On July 1 the State Department ordered Sevastyanov expelled from the country for trying to recruit a United States Government employee. The CIA man had cooperated with the FBI throughout.

Since 1950 a total of thirty-four Soviet and seventeen Communist-bloc diplomats have been expelled from the United States for a variety of reasons. Like Sevastyanov's activities, many of the espionage efforts of Soviet agents operating as diplomats seem bumbling and almost amateurish. There is a long record of such cases.

By contrast, Soviet "illegals" -- spies operating under deep cover -- are skilled experts and therefore much harder for the FBI to detect. They slip into the country with false documents, pass for ordinary Americans, and enjoy no embassy protection.

The FBI's counter-espionage work is concentrated within the continental United States. Although the bureau operated in the Western Hemisphere and cracked Nazi espionage rings in South America during World War II, espionage and counter-espionage abroad became the province of the CIA and the military intelligence organizations after the war. Contrary to popular belief, however, the FBI does have some agents overseas. They are assigned to American embassies, usually under the cover of "legal attaches."

The FBI had 14,239 employees in 1964 (of whom 6,014 were agents), but its budget of $146,900,000 ranked it as one of the smaller units of the Invisible Government, even though its counter-espionage work is vital to national security.
 

Bureau of Intelligence and Research
INR, the State Department's intelligence agency, is really misnamed, in the view of one of its former directors, Roger Hilsman.

"To be frank with you," he told a House Appropriations Subcommittee in 1961, "I am uneasy about this word 'intelligence' in the title of the bureau. It is, in a real sense, not really an intelligence agency as you think of the word and it does not collect as such.

"It is analysis-research and analysis is its function as an agency. [But] it has functions relating to the intelligence community. Normally, quick data comes from the other collection agencies, and from the diplomatic reporting which is not part of our bureau, but the embassies overseas."

As Hilsman indicated, INR relies upon the information of others -- the diplomatic service, the CIA, the military attaches and the published documents and maps of foreign nations. INR analyzes this information for the use of the Secretary of State and the other branches of the intelligence community.

Its main function on USIB is to make sure that the final intelligence estimates reflect the political, social and economic facts of life, as seen from the State Department's viewpoint.

The absence of cloak-and-dagger in INR is reflected in the fact that it is the only member of USIB whose intelligence budget is part of the public record. It employs about 350 persons and spends approximately $2,800,000 annually (the figures vary slightly from year to year). It produces over 16,000 pages of social, political, economic and biographic analyses each year.

By its own estimate, 40 to 60 percent of the raw data for these analyses come from the diplomatic reports of United States embassies abroad. INR also makes use of the scholarly output of the universities and periodically commissions a study by the academic community. It briefs the Secretary of State every day.

INR, the FBI, the AEC and the intelligence branches of the military services represent the lesser agencies of the Invisible Government. The big ones, in terms of men, money and influence, are the National Security Agency, the Defense Intelligence Agency and the CIA.


*¹ Senator Stuart Symington, the Missouri Democrat, also saw nothing amiss. He observed: "It is still legal in America, if not to make a profit, at least to try to make a profit."

*² One of the nay votes was cast by Senator I. William Fulbright, the Arkansas Democrat and chairman of the Foreign Relations Committee. Fulbright said he could not vote for McCone because his committee had not been consulted about the appointment nor given an opportunity to question McCone about his views on foreign policy.

*³ Ten days later, at three o'clock in the morning, Fulbright was roused from bed by a phone call from McCone, who wanted to inform him of the exchange of U-2 pilot Francis Gary Powers and Soviet spy Rudolf I. Abel. Annoyed, Fulbright made it clear this was not the type of consultation he had in mind.

*⁴ All figures on the number of persons involved in intelligence work are highly classified. But the ONI's figure slipped out through the oversight of a Pentagon censor in testimony released in 1961 by the House Defense Appropriations Subcommittee.

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