CIA Operation PBSUCCESS Overthrows Guatemalan Democracy, Protects United Fruit Company Interests

On June 27, 1954, democratically elected Guatemalan President Jacobo Arbenz resigned under pressure from a CIA-orchestrated coup known as Operation PBSUCCESS. The intervention, designed primarily to protect United Fruit Company’s vast landholdings, inaugurated decades of military dictatorship, civil war, and genocide that killed an estimated 200,000 Guatemalans.

The conflict began with Arbenz’s Decree 900, a modest land reform program that expropriated unused agricultural land for redistribution to peasant farmers, with compensation based on declared tax values. United Fruit, which had vastly undervalued its holdings to minimize taxes, stood to lose approximately 400,000 acres of uncultivated land. The company launched an aggressive lobbying and public relations campaign, hiring Edward Bernays—the “father of public relations”—to frame Arbenz as a Soviet puppet despite minimal communist influence in his government.

The Dulles brothers’ conflicts of interest were extensive. Secretary of State John Foster Dulles had been a partner at Sullivan & Cromwell, United Fruit’s law firm. CIA Director Allen Dulles had served on United Fruit’s board. Assistant Secretary of State for Inter-American Affairs John Moors Cabot’s family owned significant United Fruit stock. UN Ambassador Henry Cabot Lodge was a major shareholder. The Eisenhower administration approved the operation based largely on corporate-influenced intelligence assessments.

The CIA armed and trained a small exile force under Colonel Carlos Castillo Armas, then used psychological warfare—including fake radio broadcasts suggesting a large invasion—to create panic. When the Guatemalan military refused to defend Arbenz, he resigned and fled into exile. Castillo Armas immediately reversed land reforms, disenfranchised illiterate citizens, and began persecuting perceived leftists.

The Guatemala coup emboldened the CIA to pursue similar operations worldwide and established the “banana republic” model—using intelligence agencies to maintain corporate-friendly dictatorships. Guatemala descended into a 36-year civil war (1960-1996) featuring U.S.-backed military governments that conducted systematic massacres, particularly against Mayan indigenous communities, which a UN truth commission later classified as genocide.