Compare the differences in the US foreign policy to Guatemala between the Bush II and Trump administrations.

978-1-137-07848-3_5 FPPAPER 1520397055012442 GUATEMALA_POLITICAL_AND_SOCIO 24914824 R44812

This paper requires you to take an analytical approach to the issue, compare the differences in the US foreign policy to Guatemala between the Bush II and Trump administrations.

CHAPTER 5

FRAMING AND THE
POLIHEURISTIC THEORY
OF DECISION:
THE UNITED FRUIT
COMPANY AND THE 1954
U.S.-LED COUP IN GUATEMALA

Michelle M.Taylor-Robinson and Steven B. Redd

Introduction

On June 27, 1954, President Jacobo Arbenz Guzmán of Guatemala re-signed. His government was threatened with an invasion by a group
of exiles led by Lieutenant Colonel Carlos Castillo Armas who were part
of a U.S. Central Intelligence Agency (CIA)–sponsored covert operation to
overthrow Arbenz. Militarily, Castillo Armas’s small band of exiles had not
been very successful; however, the intensive psychological battle being
waged by the CIA was very intimidating to the people of Guatemala City,
the Guatemalan military, and even to President Arbenz. Arbenz felt certain
the Guatemalan military could defeat Castillo Armas, but his concern was
that the United States would send its own military to invade if he did not
back down (Gleijeses 1991, 317–322). Thus, the United States brought an
end to the Guatemalan revolution of 1944 and the democratic government
it established.The United Fruit Company also got rid of a government that
seriously threatened its interests in Guatemala and throughout the region of
Central America.This brief period of reform and progress in Guatemala was

A. Mintz (ed.), Integrating Cognitive and Rational Theories of Foreign Policy Decision Making
© Alex Mintz 2003

replaced by a succession of military-led authoritarian regimes and more
than three decades of instability and guerrilla warfare.

This chapter uses the case of the 1954 U.S.-led coup in Guatemala to
illustrate how a third party can attempt to frame a situation to bring about
a desired foreign policy outcome. Specifically, we utilize the poliheuristic
theory of decision and the concept of framing to more fully understand
U.S. actions in Guatemala. This case has long been a subject of debate
among scholars concerning the reasons for U.S. intervention, particularly
whether the decision was based on Cold War security concerns or eco-
nomic considerations.We argue that the United Fruit Company was mo-
tivated by its own economic concerns but recognized that those concerns
alone were not sufficient to induce the U.S. government to take action
against the Arbenz regime. Hence, United Fruit framed events in
Guatemala, through the U.S. press and contacts within the U.S. govern-
ment, as a Cold War threat to the United States.We contend that framing
and lobbying by a third party (the United Fruit Company) constrained
President Eisenhower’s choice set and led him to the decision to authorize
a covert operation to overthrow President Arbenz.

The stage began to be set for U.S. intervention in Guatemala in 1944
when a popular revolutionary uprising overthrew the longtime dictator,
General Jorge Ubico, who had ruled the country since 1931. Ubico came
to power as a result of the world depression and its harsh impact on
Guatemala’s economy. In response to growing working class unrest, the
Guatemalan elite decided that they needed a strong leader, and General
Ubico was their choice (Gleijeses 1991, 11). The “revolution” that over-
threw Ubico was a spontaneous uprising by “frustrated and idealistic urban
middle-class groups” (Ebel 1996, 458; see also Schneider 1958, 10–11). Al-
though Ubico had succeeded in balancing the country’s budget, reducing
graft, and building some infrastructure, his was a staid government that re-
lied on repression to silence opposition and strikes and unpaid, forced
labor to build public works projects. He was also an old-style dictator in
his dealings with the United States and with United Fruit (UFCO). He
cooperated with the company, gave it the policy concessions it wanted, and
did not in any way threaten its lopsided, profitable arrangement in
Guatemala (Gleijeses 1991, 11–22; Melville and Melville 1971, 21–22;
Schneider 1958, 6–9).

In 1944, what started out as a teachers’ strike grew, ending with the
ouster of Ubico and then the election of Dr. Juan José Arévalo to the pres-
idency. Arévalo’s rhetoric of spiritual socialism and passage of a labor code
threatened the Guatemalan elite and United Fruit, and began to concern
the United States. However, Arévalo served out his six-year term, which

TAY L O R – RO B I N S O N A N D R E D D

Instructions:

Write 10-12 pages, double spaced (not counting your work cited) on a foreign policy issue
facing the United States in the Clinton, Bush II, Obama, or Trump administration (1993-Present.)

*All papers will be checked for originality using NYU’s plagiarism detection software.

This paper requires you to take an analytical approach to the issue of your choice.

I want you to apply some of the theories and approaches that we have used in class such as:
• The Realist, Liberalist, and Marxist approaches, or other schools of foreign policy
• Domestic approaches to understanding foreign policy such as Pluralism, Elitism, The

“diversionary theory of war” or the “military industrial complex”
• Changing structural realities in the global system
• Psychological or personality based explanations of national leader’s behavior and

decisions
• Bureaucratic or organizational approaches to foreign policy
• The use of “soft power” (Nye) in US foreign policy
• Differences between the “Clinton Doctrine”, “The Bush Doctrine”, the “Obama Doctrine”,

and the still forming “Trump Doctrine”
• Rosenau’s 5 sources of foreign policy influence:

o External environment of the international system
o The domestic societal environment of a nation state
o The government structure that specifies the policy making process
o The bureaucratic roles occupied by individual decision makers
o Personal characteristics and idiosyncrasies of individual foreign policy officials

and government elites.

This paper should not be:
o A persuasive policy brief or white paper arguing for a particular policy
o An encyclopedic entry or statement of the facts without analysis
o An opinion piece

Rather, I want you to develop as scholars and find the common themes, patterns, and
examples of theories that we have discussed in this class in their application to recent and
current foreign policy issues.
_________________________________________________________________________

Choice TOPIC **:

compare the differences in the US foreign policy to Guatemala between the Bush II and Trump
administrations.

Today foreign policy in Guatemala and US is that the US is using guatemala as a place to
deport people to. however the relationship with guatemla has been different since Reagan
financed the civil war in guatemala in 1954.

(The 1954 Guatemalan coup d’état, code-named Operation PBSUCCESS, was a covert operation
carried out by the U.S. Central Intelligence Agency (CIA) that deposed the democratically elected
Guatemalan President Jacobo Árbenz and ended the Guatemalan Revolution of 1944–1954. It installed
the military dictatorship of Carlos Castillo Armas, the first in a series of U.S.-backed authoritarian rulers in
Guatemala.

https://en.wikipedia.org/wiki/Central_Intelligence_Agency

https://en.wikipedia.org/wiki/Deposition_(politics)

https://en.wikipedia.org/wiki/Guatemalan_presidential_election,_1950

https://en.wikipedia.org/wiki/Jacobo_%C3%81rbenz

https://en.wikipedia.org/wiki/Guatemalan_Revolution

https://en.wikipedia.org/wiki/Military_dictatorship

https://en.wikipedia.org/wiki/Carlos_Castillo_Armas

https://en.wikipedia.org/wiki/Guatemala

The Guatemalan Revolution began in 1944, after a popular uprising toppled the military dictatorship of
Jorge Ubico. Juan José Arévalo was elected president in Guatemala’s first democratic election. He
introduced a minimum wage and near-universal suffrage, and turned Guatemala into a democracy.
Arévalo was succeeded by Árbenz in 1951, who instituted land reforms which granted property to
landless peasants.[1] The Guatemalan Revolution was disliked by the United States federal government,
which was predisposed during the Cold War to see it as communist. This perception grew after Árbenz
had been elected and formally legalized the communist Guatemalan Party of Labour. The United Fruit
Company (UFC), whose highly profitable business had been affected by the end to exploitative labor
practices in Guatemala, engaged in an influential lobbying campaign to persuade the U.S. to overthrow
the Guatemalan government. U.S. President Harry Truman authorized Operation PBFORTUNE to topple
Árbenz in 1952; although the operation was quickly aborted, it was a precursor to PBSUCCESS.
Dwight D. Eisenhower was elected U.S. President in 1952, promising to take a harder line against
communism; the links that his staff members John Foster Dulles and Allen Dulles had to the UFC also
predisposed them to act against the Guatemalan government. Additionally, the U.S. federal government
drew exaggerated conclusions about the extent of communist influence among Árbenz’s advisers.
Eisenhower authorized the CIA to carry out Operation PBSUCCESS in August 1953. The CIA armed,
funded, and trained a force of 480 men led by Carlos Castillo Armas. The coup was preceded by U.S.
efforts to criticize and isolate Guatemala internationally. Castillo Armas’ force invaded Guatemala on 18
June 1954, backed by a heavy campaign of psychological warfare. This included a radio station which
broadcast anti-government propaganda and a version of military events favorable to the rebellion,
claiming to be genuine news, as well as air bombings of Guatemala City and a naval blockade. The
invasion force fared poorly militarily, and most of its offensives were defeated. However, psychological
warfare and the fear of a U.S. invasion intimidated the Guatemalan army, which eventually refused to
fight. Árbenz briefly and unsuccessfully attempted to arm civilians to resist the invasion, before resigning
on 27 June. Castillo Armas became president ten days later, following negotiations in San Salvador.
Described as the definitive deathblow to democracy in Guatemala, the coup was widely criticized
internationally, and strengthened the long-lasting anti-U.S. sentiment in Latin America. Attempting to
justify the coup, the CIA launched Operation PBHISTORY, which sought evidence of Soviet influence in
Guatemala among documents from the Árbenz era: the effort was a failure. Castillo Armas quickly
assumed dictatorial powers, banning opposition parties, imprisoning and torturing political opponents, and
reversing the social reforms of the revolution. Nearly four decades of civil war followed, as leftist guerrillas
fought the series of U.S.-backed authoritarian regimes whose brutalities include a genocide of the Maya
peoples.)

Sources (5 pdf attachments ) ( 6 links to pdf and sites)

http://www.coha.org/latin-america-the-bush-administration’s-disappeared-foreign-policy-and-kerry’s-
future-vision-for-the-region/

https://en.wikipedia.org/wiki/Guatemala–United_States_relations ** Helps explain FP and US relation in
guatemala

https://foreignpolicy.com/2019/07/30/guatemala-declares-war-on-history-dirty-war-archives-jimmy-
morales/

https://www.foreignaffairs.com/articles/2003-09-01/bush-and-foreign-aid

‘Did Reagan Finance Genocide in Guatemala?’

https://heinonline.org/HOL/LandingPage?handle=hein.journals/ielr35&div=80&id=&page=

https://en.wikipedia.org/wiki/Military_dictatorship

https://en.wikipedia.org/wiki/Jorge_Ubico

https://en.wikipedia.org/wiki/Juan_Jos%C3%A9_Ar%C3%A9valo

https://en.wikipedia.org/wiki/Guatemalan_presidential_election,_1944

https://en.wikipedia.org/wiki/Minimum_wage

https://en.wikipedia.org/wiki/Universal_suffrage

https://en.wikipedia.org/wiki/Liberal_democracy

https://en.wikipedia.org/wiki/Decree_900

https://en.wikipedia.org/wiki/Latin_America%E2%80%93United_States_relations

https://en.wikipedia.org/wiki/Cold_War

https://en.wikipedia.org/wiki/Communism

https://en.wikipedia.org/wiki/Guatemalan_Party_of_Labour

https://en.wikipedia.org/wiki/United_Fruit_Company

https://en.wikipedia.org/wiki/Harry_Truman

https://en.wikipedia.org/wiki/Operation_PBFORTUNE

https://en.wikipedia.org/wiki/Dwight_D._Eisenhower

https://en.wikipedia.org/wiki/Anti-communism

https://en.wikipedia.org/wiki/John_Foster_Dulles

https://en.wikipedia.org/wiki/Allen_Dulles

https://en.wikipedia.org/wiki/Carlos_Castillo_Armas

https://en.wikipedia.org/wiki/Psychological_warfare

https://en.wikipedia.org/wiki/Guatemala_City

https://en.wikipedia.org/wiki/Military_of_Guatemala

https://en.wikipedia.org/wiki/San_Salvador

https://en.wikipedia.org/wiki/Anti-Americanism#Latin_America

https://en.wikipedia.org/wiki/Operation_PBHISTORY

https://en.wikipedia.org/wiki/Soviet_Union

https://en.wikipedia.org/wiki/Guatemalan_Civil_War

https://en.wikipedia.org/wiki/Guatemalan_genocide

Guatemala Declares War on History

https://www.foreignaffairs.com/articles/2003-09-01/bush-and-foreign-aid

‘Did Reagan Finance Genocide in Guatemala?’

https://heinonline.org/HOL/LandingPage?handle=hein.journals/ielr35&div=80&id=&page=

https://www.cbsnews.com/news/guatemala-asylum-deal-us-begins-deporting-asylum-seekers-to-
guatemala-under-new-deal/

https://www.cbsnews.com/news/guatemala-asylum-deal-us-begins-deporting-asylum-seekers-to-guatemala-under-new-deal/

Holland

Private Sources of U.S. Foreign Policy

William Pawley and the 1954 Coup d’État
in Guatemala

✣ Max

Holland

Introduction

In May 2003 the U.S. Department of State released a retrospective volume to
supplement the publication twenty years earlier of a standard Foreign Relations
of the United States (FRUS) compilation of documents on Latin America from
1952 to 1954.1 This supplemental volume was wholly devoted to the role of
the U.S. government, especially the Central Intelligence Agency (CIA), in the
overthrow of Guatemalan President Jacobo Arbenz Guzmán in 1954.2

The unprecedented step of publishing a supplement twenty years after an
ostensibly deªnitive account had been released was taken only because of a
loud hue and cry from historians. They rightly claimed that the earlier (1983)
FRUS volume threatened to undermine the integrity of the series by not fully
documenting Washington’s role in the ouster of Arbenz. Because the 1983
volume was incomplete, it conveyed a misleading history of U.S. relations
with Guatemala. The U.S. Congress agreed with this argument and passed
special legislation in 1991 requiring all federal agencies to provide State De-
partment historians with the documents necessary for a “thorough, accurate,

1. U.S. Department of State, Foreign Relations of the United States, 1952–1954, American Republics,
Vol. IV (hereinafter referred to as FRUS, with appropriate year and volume numbers).

2. FRUS, 1952–1954, Guatemala (Washington, DC: U.S. Government Printing Ofªce, 2003). On
the day this supplement was published, the CIA made available 5,120 redacted documents, totaling
14,000 pages, pertaining to Operations PBFORTUNE, PBSUCCESS, and PBHISTORY, the agency
cryptonyms denoting the primary covert activities relating to the 1954 coup d’état. (PBFORTUNE
was a 1951–1952 contingency plan for ousting Arbenz; PBSUCCESS was the operation actually im-
plemented in 1953–1954; PBHISTORY was the post-coup operation to collect and analyze docu-
ments from the Arbenz government). These documents, only some of which were presented in FRUS,
1952–1954, Guatemala, were posted on the CIA’s Electronic Reading Room webpage, http://
www.foia.cia.gov/guatemala.asp (hereinafter referred to as CIA Guatemala ERR).

Journal of Cold War Studies
Vol. 7, No. 4, Fall 2005, pp. 36–

and reliable documentary record.”3 That law, greatly facilitated by the coinci-
dental end of the Cold War, led to a general loosening of the CIA’s grip on
heretofore sacrosanct documents from the Directorate of Plans (DD/P), the
division responsible for carrying out covert actions approved by the president
in the 1950s. The result is that the Guatemalan coup, a seminal event from
every point of view, is one of the most thoroughly documented episodes of
the Cold War, at least from the U.S. side.4

Private Sources of U.S. Foreign Policy

3. “Foreign Relations, 1952–1954, Guatemala,” Press Release, Ofªce of the Historian, Bureau of
Public Affairs, U.S. Department of State, 15 May 2003.

4. The Archivo General de Centro América in Guatemala City houses relevant documents, but its ªles
are unorganized, according to one prominent scholar who has used them. See Piero Gleijeses, Shat-
tered Hope: The Guatemalan Revolution and The United States, 1944–1954 (Princeton, NJ: Princeton
University Press, 1991), p. 396. Relevant and important documents surely exist in the archives of the
former Soviet Union and Czechoslovakia, especially regarding the Czechoslovak arms shipment of
May 1954. Karel Sieber, a young Czech scholar with the Center for Cold War History at the Institute
for Contemporary History (Prague), is researching this and related subjects. The U.S. literature on
PBSUCCESS was one of the most extensive collections on a single Cold War event even before the
publication of the supplemental FRUS volume. Covert interventions, climaxing in the overthrow of
Chile’s Salvador Allende in September 1973, have also deªned historical writing on inter-American re-
lations for a generation of scholars, as Max Paul Friedman observes in “Retiring the Puppets, Bringing
Latin American Back In: Recent Scholarship on United States–Latin American Relations,” Diplomatic
History, Vol. 27, No. 5 (November 2003), pp. 541–552. Standard scholarly works include Cole
Blasier, The Hovering Giant: U.S. Responses to Revolutionary Change in Latin America (Pittsburgh: Uni-
versity of Pittsburgh Press, 1976); Blanche Wiesen Cook, The Declassiªed Eisenhower: A Divided Leg-
acy (Garden City, NY: Doubleday, 1981); Richard Immerman, The CIA in Guatemala: The Foreign
Policy of Intervention (Austin: University of Texas Press, 1982); Bryce Wood, The Dismantling of the
Good Neighbor Policy (Austin: University of Texas Press, 1985); Stephen Rabe, Eisenhower and Latin
America: The Foreign Policy of Anti-Communism (Chapel Hill: University of North Carolina Press,
1988); Gleijeses, Shattered Hope; and Nicholas Cullather, Secret History: The CIA’s Classiªed Account of
Its Operations in Guatemala, 1952–1954 (Stanford, CA: Stanford University Press, 1999). For a recent
work on the aftermath of the coup, see Stephen Streeter, Managing the Counterrevolution: The United
States and Guatemala, 1954–1961 (Athens, OH: Ohio University Press, 2000). The most prominent
works by journalists and radical leftist critics of American foreign policy are David Horowitz, The Free
World Colossus: A Critique of American Foreign Policy in the Cold War (New York: Hill & Wang, 1965);
Susanne Jonas and David Tobis, eds., Guatemala (Berkeley: North American Congress on Latin Amer-
ica [NACLA], 1974); Thomas McCann, An American Company: The Tragedy of United Fruit (New
York: Crown Publishers, 1976); and Stephen Schlesinger and Stephen Kinzer, Bitter Fruit: The Untold
Story of the American Coup in Guatemala (Garden City, NY: Doubleday, 1982). General histories of
the CIA and biographies of key ofªcials that treat PBSUCCESS in some detail include Andrew Tully,
CIA: The Inside Story (New York: William Morrow, 1962); David Wise and Thomas Ross, The Invisi-
ble Government (New York: Random House, 1964); Thomas Powers, The Man Who Kept the Secrets:
Richard Helms and the CIA (New York: Alfred Knopf, 1979); John Ranelagh, The Agency: The Rise and
Decline of the CIA (New York: Simon & Schuster, 1986); John Prados, Presidents’ Secret Wars: CIA and
Pentagon Covert Operations since World War II (New York, William Morrow, 1986); Burton Hersh,
The Old Boys: The American Elite and the Origins of the CIA (New York: Charles Scribner’s Sons,
1992); Peter Grose, Gentleman Spy: The Life of Allen Dulles (Boston: Houghton Mifºin, 1994); Chris-
topher Andrew, For the President’s Eyes Only: Secret Intelligence and the American Presidency from Wash-
ington to Bush (New York: HarperCollins, 1995); William Blum, Killing Hope: U.S. Military and CIA
Interventions since World War II (Monroe, ME: Common Courage Press, 1995); and Evan Thomas,
The Very Best Men: Four Who Dared – The Early Years of the CIA (New York: Simon & Schuster, 1995).
For useful memoirs of participants, see Dwight Eisenhower, The White House Years: Mandate for
Change, 1953–1956 (Garden City, NY: Doubleday, 1963); E. Howard Hunt, Undercover: Memoirs of

Despite the wealth of formerly top secret records now available, the role
of William Pawley, a key actor in Operation PBSUCCESS, remains largely
undocumented and therefore underappreciated. Known primarily as a fabu-
lously wealthy businessman, Pawley was instrumental in sundry aspects of this
covert operation, including the all-important provision of aircraft to the anti-
Arbenz forces in June 1954. Yet Pawley’s name appears in only two of the for-
merly sensitive documents released in 2003. That is not a quantitative im-
provement over the 1983 FRUS volume, which contained just ªve documents
referring to Pawley.5

Responsibility—if that is the right word—for this void lies neither with
the State Department historians nor with their CIA colleagues but with the
nature of the historical craft itself. The most that scholars can aspire to pro-
duce, even under ideal circumstances, is a closely reasoned facsimile of what
happened. A historical event can seldom, if ever, be recaptured in its full com-
plexity. In this instance, moreover, considerable pains were taken to keep
Pawley’s involvement entirely secret from the public, and certain aspects were
shrouded from State Department ofªcials working on the overt complements
to PBSUCCESS. If Pawley had not decided, late in life, to reminisce about
his activities in an unpublished memoir, his part in the implementation of
PBSUCCESS would probably have remained murky at best.6

Holland

an American Secret Agent (New York: Berkley Publishing, 1974); David Atlee Phillips, The Night
Watch: 25 Years of Peculiar Service (New York: Atheneum, 1977); Richard Bissell Jr. with Jonathan
Lewis and Frances Pudlo, Reºections of a Cold Warrior: From Yalta to the Bay of Pigs (New Haven: Yale
University Press, 1996); and Richard Helms with William Hood, A Look over My Shoulder: A Life in
the Central Intelligence Agency (New York: Random House, 2003). Operation PBHISTORY, the fol-
low-up to PBSUCCESS, is described in Max Holland, “Operation PBHISTORY: The Aftermath of
SUCCESS,” International Journal of Intelligence and Counterintelligence, Vol. 17, No. 2 (Summer
2004), pp. 213–241.

5. Although Pawley is mentioned by name in only two of the newly declassiªed documents, dozens of
them are indispensable in corroborating Pawley’s unpublished account of his role. In addition, the two
documents that name him are signiªcant. The ªrst is a memorandum from Eisenhower’s new CIA di-
rector, Allen Dulles, to DD/P chief Frank Wisner, suggesting one year before the coup that Pawley be
appointed a special emissary to Guatemala in order to prepare a report to the president. The second
document conªrms Pawley’s instrumental role in providing coup leaders with an air force. See “Mem-
orandum re PBFORTUNE,” 8 March 1953, in FRUS, 1952–1954, Guatemala, p. 79; and “Memo-
randum for the Record: Notes on Meeting with Messrs. Pawley and Hensel,” 8 June 1954, in CIA
Guatemala ERR. The references from the earlier FRUS volume are “Memorandum of Conversation
with the President, by the Secretary of State,” 19 May 1954, in FRUS, 1952–1954, Vol. IV, p. 1117;
“The Second Secretary of Embassy in Guatemala (Hill), Temporarily in Washington, to the Ambassa-
dor in Guatemala (Peurifoy),” 30 May 1954, in FRUS, 1952–1954, Vol. IV, p. 1154; “Notes of a
Meeting of the Guatemalan Group, Held in the Department of State,” 9 June 1954, in FRUS, 1952–
1954, Vol. IV, p. 1160; “Notes of a Meeting of the Guatemalan Group, Held at the Department of
State,” 16 June 1954, in FRUS, 1952–1954, Vol. IV, pp. 1170–1171; and “Notes of a Meeting of the
Guatemalan Group, Held at the Department of State, 25 June 1954, in FRUS, 1952–1954, Vol. IV,
p. 1186.

6. Pawley’s papers (hereinafter WDPP) are housed at the George C. Marshall Library (GCML) in
Lexington, Virginia, and consist of two archival boxes. Most of the space is taken up by Pawley’s un-
published 1974 manuscript, which he worked on intermittently for at least seven years. The often pro-

William Douglas Pawley, as his obituary in The New York Times noted in
1977, “led a life that could have been the substance of several old-time dime
novels.”7 Despite having little formal education, Pawley was, as The Miami
Herald put it, a “Florida legend of industry, diplomacy, politics and occasional
international intrigue . . . a swashbuckler in a gray ºannel suit with a bit of a
Midas touch.”8 Before Pawley committed suicide, he enjoyed a high-proªle
career as an international salesman, businessman, aviation entrepreneur, U.S.
ambassador, ªnancier, transit and sugar magnate, philanthropist, and special
presidential envoy who dressed like an “‘upper bracket version’ of former New
York mayor Jimmy Walker.”

Somewhat less well known were Pawley’s covert activities on behalf of
(and sometimes despite) the U.S. government.9 Although Pawley was known
for his expertise on Asia, his ªrst and most lasting international interest was
Latin America. In 1900, four years after his birth in Florence, South Carolina,
Pawley’s father moved the family to Caimanera, Cuba, to earn a living supply-
ing the U.S. Navy at the Guantánamo naval base just wrested from Spain.
Growing up among Cubans, William learned to speak Spanish with a sibilant
Castilian lisp, and by the age of eleven he had developed a knack for salesman-
ship when vending candies and fruit from a rowboat to sailors in Guantán-
amo Bay.10 After graduating from a military academy in Georgia, he was hired
by a New York export ªrm to travel through Venezuela, mostly by burro, ped-
dling everything from stearic acid to parafªn for candles, the only light source

Private Sources of U.S. Foreign Policy

vocative manuscript must be treated cautiously, as it appears to be written primarily from memory. Al-
though it is sometimes difªcult to square precise dates and other details against the documentary
record, the manuscript (entitled Russia Is Winning) holds up very well overall against primary sources
released decades later, such as the pertinent FRUS volumes and CIA Guatemala ERR documents,
Richard Bissell’s memoir, and well-regarded secondary accounts such as Evan Thomas’s history of the
CIA in the 1950s. Thomas had privileged access to internal CIA materials.

7. “William D. Pawley, Financier, Dies at 80,” The New York Times, 8 January 1977, p. 18; and “Wil-
liam Pawley, Ex-Envoy to Brazil, Aviation Expert,” The Washington Post, 9 January 1977, p. A31.

8. “William D. Pawley Kills Himself,” The Miami Herald, 8 January 1977, p. 5.

9. Mary Van Rensselaer Thayer, “‘Flying Tiger’ Diplomat Is U.S. Host at Rio,” The Washington Post,
14 August 1947, p. 7; Thomas Paterson, Contesting Castro: The United States and the Triumph of the
Cuban Revolution (New York: Oxford University Press, 1994), pp. 206–211; and Max Holland, “A
Luce Connection: Senator Keating, William Pawley, and the Cuban Missile Crisis,” Journal of Cold
War Studies, Vol. 1, No. 3 (Fall 1999), pp. 156–165. One reason for Pawley’s obscurity is that he was
(and is) often confused with two other prominent men with similar sounding names. One is William
Paley, the long-time chairman of the Columbia Broadcasting System (CBS). The other is the wealthy
California oil executive Edwin Pauley, who was about the same age and also active in the Democratic
Party. Pauley was the treasurer of the Democratic National Committee in the 1940s and a member of
President Harry Truman’s “kitchen cabinet.”

10. Nixon Smiley, “The Private Wars of William Pawley,” Tropic (Miami Herald Sunday Magazine),
Vol. 5, No. 34 (22 August 1971), p. 8.

for thousands of small towns and villages.11 He later bragged that these travels
enabled him to learn “all the accents and inºections and the idioms of every
place [Spanish is] spoken by banker or laborer.”12 His varied business activities
during these years took him to nearly every country in Central and South
America, and he made lifelong acquaintances with the local elites in many of
those states. By the age of twenty-nine, Pawley had made his ªrst half-million
by speculating in Florida real estate during the 1925 land boom.13

In 1928 the entrepreneurial-minded Pawley entered the burgeoning but
risky world of commercial aviation on the basis of his friendship with Glenn
Curtiss, one of the ªrst commercial airplane builders. Pawley’s initial venture
was the National Cuban Curtiss Company, a concern that was eventually
merged into Pan American Airways. Subsequently, Pawley’s focus shifted to
the even bigger market in China, and he became president of its national air-
line in 1933.14 Every prominent ªgure in China in the 1930s, especially a for-
eign businessman involved in such a strategic economic asset as the national
airline, was necessarily dependent on the good graces of the country’s dictator,
Generalissimo Chiang Kai-shek. Pawley became intent on helping Chiang
overcome the challenge posed by Imperial Japan. Pawley was one of the ªrst
in the business community to warn about the Japanese threat to U.S. inter-
ests, and he soon became one of the most persistent voices on this subject in
Washington.

After war broke out between Japan and China in July 1937, Pawley
pleaded with every U.S. ofªcial he could ªnd, arguing that it was crucial to
defend the Burma Road into China to enable that country to persevere
against Japan.15 Then, in May 1939, the idea of a foreign legion of volunteer
American airmen was broached during an otherwise routine business meeting
with the generalissimo. Pawley immediately “saw the tactical military advan-
tages that would accrue to America, should Japan attack us, by having a nu-
cleus of airmen experienced in Jap [sic] air tactics.”16 By December 1940, the

Holland

11. William Douglas Pawley, Russia Is Winning, 1974, in GCML, WDPP, prologue.

12. “William D. Pawley Kills Himself,” p. 5. Decades later, Pawley’s command of the language would
impress even General Francisco Franco. A member of the Spanish aristocracy, Franco prided himself
on speaking the best Castilian. Smiley, “Private Wars,” p. 8.

13. Pawley initially made $1.2 million in the 1925 boom, then lost $800,000 in the bust. Smiley, “Pri-
vate Wars,” p. 8; “William Pawley, Ex-Envoy to Brazil,” p. A31; and Pawley, Russia Is Winning, p. 4.

14. Smiley, “Private Wars,” p. 11; and U.S. Congress, Committee on the Judiciary, Subcommittee to
Investigate the Administration of the Internal Security Act and Other Internal Security Laws, Commu-
nist Threat to the United States through the Caribbean, 86th Cong., 2nd sess., 1960, p. 712.

15. Charles Romanus and Riley Sunderland, United States Army in World War II: Stilwell’s Mission to
China (Washington, DC: Ofªce of the Chief of Military History, U.S. Department of the Army,
1953), p. 10.

16. “A Brief History of the Flying Tigers” privately printed, in GCML, WDPP, Box 1, pp. 5–6.

Roosevelt administration agreed. Pawley’s sales pitch in Washington resulted
in a special arrangement whereby trained American pilots were permitted to
“resign” from the U.S. Army Air Corps without losing rank and sign contracts
with Pawley’s Central Aircraft Manufacturing Company (CAMCO), which
he had purchased in 1938.17

As far as the American public was concerned, Claire Chennault was the
heroic face of the American Volunteer Group (AVG), or “Flying Tigers” as the
AVG was dubbed by the American press. To the extent that Pawley was ever
mentioned, he was the “mystery man who agitated the famous ‘Flying Tigers’
into existence.”18 But Pawley was the president and only American stock-
holder of CAMCO, the private corporation that employed all the pilots and
mechanics.19 In this capacity, he was responsible for recruiting the volunteers,
transporting them to China, and then organizing the men and matériel into a
de facto American tactical ªghter force that was eventually folded into the
U.S. Army Air Corps after Pearl Harbor. Prior to December 1941, these activ-
ities were funded by the U.S. government, though its hand was not visible.20

The employment of pilots and mechanics had to be done clandestinely, and
Pawley’s corporation provided that cover.

Although the “Flying Tigers” operation garnered the most publicity, it
represented only a small part of Pawley’s contribution to the war effort as a
private businessman. He provided $30 million worth of airplanes and avia-
tion services to China over a seven-year span and built a manufacturing plant
in India, Hindustan Aircraft Limited, that employed 15,000 people at its
peak and became the principal maintenance and overhaul base for the entire
China-Burma-India theater. This plant saved the Allies millions of tons of
shipping space during the battle for air supremacy on the Asian continent.21

In May 1946, in recognition of Pawley’s strategic foresight years before Amer-
ica’s entry into the war, and for his singular achievements in carrying out co-

Private Sources of U.S. Foreign Policy

17. Ibid; Senate Subcommittee, Communist Threat, p. 755; Romanus and Sunderland, Stilwell’s Mis-
sion, p. 18; and Michael Schaller, “American Air Strategy in China, 1939–1941: The Origins of Clan-
destine Air Warfare,” American Quarterly, Vol. 28, No. 1 (Spring 1976), p. 13. A brief history of
CAMCO is also included in U.S. Congress, Senate, Committee on the Judiciary, Subcommittee to In-
vestigate the Administration of the Internal Security Act and Other Internal Security Laws,
Morgenthau Diary (China), Vol. 1, 89th Cong., 1st sess., 1965, Committee Print, pp. 38–39.

18. “American Makes Planes in India,” Life, 22 March 1943, pp. 18–19.

19. Pawley’s partner in CAMCO was H.H. Kung, China’s ªnance minister and Madame Chiang Kai-
shek’s brother-in-law.

20. Senate Subcommittee, Communist Threat, p. 722; and Dwight Eisenhower to Maxwell Taylor, 26
June 1961, in Dwight D. Eisenhower Library (DDE Library), Post-Presidential, Augusta-Walter Reed
Series [April–June 1961]. Schaller writes that CAMCO’s operating funds came from China Defense
Supplies (CDS), the entity designated in April 1941 as China’s agent for the receipt of supplies and
money under the Lend-Lease Act. Schaller, “Air Strategy in China,” p. 13.

21. “American Makes Planes in India,” p. 18.

vert and wartime operations in the China-India-Burma theater, President
Truman awarded Pawley the Medal of Merit. This military honor was the
highest that could be bestowed on a civilian and was emblematic of the state-
private industry cooperation that won the war for the Allies, a war that was in
many ways a contest of industrial production. Despite Pawley’s other activities
during the war, he would forever consider his role in the “Flying Tigers” co-
vert operation the high point of his life.22

Pawley’s prewar and wartime experiences shaped his whole approach to
the Cold War. They instilled in him a penchant for private, and often covert,
action. Of equal import, he always viewed U.S. investments abroad as the cut-
ting edge of the national interest, with threats to the former indistinguishable
from those to the latter. Pawley believed that intrepid American businessmen
(often in the extractive industries, such as mining and oil exploration, or basic
utilities such as transportation) functioned—or at least ought to function—as
a kind of early warning system for the intelligence community and foreign
policymakers in Washington. Any assault on free enterprise, he maintained,
was invariably the ªrst evidence of a totalitarian impulse. Commerce, in his
view, was the true frontline of U.S. foreign policy and thus the ªrst to come
under attack, regardless of whether the threat emanated from Japanese impe-
rialism, European fascism, or world Communism.23

This perspective was not exclusive to Pawley. What made him a contro-
versial ªgure, however, was his determination to apply the mores of commerce
to other ªelds, including diplomacy. Pawley’s model for getting things done
was the raw world of doing business, a world in which decisiveness was re-
warded and ambiguity or simple goodwill rarely turned a proªt. When the
U.S. government was near or in a wartime footing, Pawley’s courage and
“ªghting spirit” were eagerly welcomed in Washington.24 He had unquench-
able energy and wore out many a man decades younger, becoming well
known for “conferring, buttonholing, cajoling [and] yakking endlessly.”25 Yet
this same drive, combined with Pawley’s impetuousness, also made him hard
to control. During the Cold War, the government’s appreciation of Pawley’s
peculiar set of abilities waxed and waned according to the temperature of the

Holland

22. Senate Subcommittee, Communist Threat, p. 713; Eisenhower to Taylor, 26 June 1961; and “Wil-
liam D. Pawley Kills Himself,” p. 5.

23. Nowhere would this be more true than in Guatemala, where U.S. corporations such as the United
Fruit Company and International Railways of Central America were largely depicted and perceived as
“huge voracious monopolies.” Ronald M. Schneider, Communism in Guatemala, 1944–1954 (New
York: Frederick Praeger, 1958), pp. 46–48.

24. “Citation Accompanying the Medal for Merit Awarded to William D. Pawley, 13 May 1946,” in
Public Papers of the Presidents, Harry S. Truman, 1945–1953 (Washington, DC: U.S. Government
Printing Ofªce, 1966).

25. Smiley, “Private Wars,” p. 8.

moment, a situation that proved frustrating to Pawley. Patience in carrying
out a complex foreign policy was fundamentally incompatible with his
worldview. This became evident almost from the onset of the Cold War, espe-
cially once the new struggle dragged on for decades without a clear-cut victor.

In late 1945, Harry Truman appointed Pawley the U.S. ambassador to Peru
and one year later reassigned him to Brazil, where he served until 1947.26

Pawley was neither the most diplomatic nor learned of ambassadors
(reºecting his meager education, he had trouble spelling multisyllabic words),
and he reportedly contracted stomach ulcers in Rio de Janeiro—and un-
doubtedly gave some in return. For a time he hoped to replace Spruille
Braden as assistant secretary of state for Latin America and openly cam-
paigned for the job. As a generous contributor to the Democratic Party in
1948, Pawley had the backing of the Democratic National Committee. But
his temperament and raw ambition pitted him against career ofªcials who
thought him ill-suited for such a prominent post.27 With his rise in the State
Department stymied, Pawley became a roving troubleshooter, ªlling in wher-
ever he was needed.28 His afªliation with the State Department ended in
1949, and for the next year or so he concentrated on his business interests, in-
cluding a new one: in 1950 he took over the assets of a troubled Cuban trolley
company and started Havana Autobuses Modernos, a privately-owned transit
company that functioned as the city’s main bus system.29

By his own account, Pawley became aware no later than 1935 of the

Private Sources of U.S. Foreign Policy

26. In this regard Pawley was not unusual. Before the U.S. Foreign Service was professionalized, am-
bassadorships were often awarded to persons of means who could afford to serve. The practice still ex-
ists today, though to a much lesser degree. In his memoir, Pawley claims that President Franklin Roo-
sevelt asked him to be the ªrst U.S. ambassador to postwar Czechoslovakia “because he wanted a
tough negotiator who would stand up to the power play that was not long in coming from the
U.S.S.R.” Pawley, Russia Is Winning, p. 7.

27. Braden in his memoir tells of a confrontation with Pawley in front of about twenty other Foreign
Service ofªcers. After Pawley vehemently denied campaigning for Braden’s post, Braden cited evidence
to the contrary, and Pawley abruptly walked out of the meeting. From then on, Pawley regarded
Braden as his sworn enemy. When Pawley testiªed before the Senate Internal Security Subcommittee
in the 1960s, he accused Braden of being a Communist sympathizer, the “least likely of charges” given
Braden’s conservatism. See Spruille Braden, Diplomats and Demagogues: The Memoirs of Spruille
Braden (New Rochelle, NY: Arlington House, 1971), pp. 379–380.

28. Smiley, “Private Wars,” p. 8; Senate Subcommittee, Communist Threat, p. 712. In this capacity in
1948, Pawley attended the Bogotá Conference, negotiated U.S. military base rights in Franco’s Spain,
and was a member of the U.S. delegation to the United Nations (UN) General Assembly meeting in
Paris. The negotiation with Franco involved U.S. support for Madrid’s admission to the UN in return
for basing rights in Spain.

29. Senate Subcommittee, Communist Threat, p. 712.

menace posed by world Communism. The 1948 riot in Bogotá, which
Pawley attributed to Communist agitation, and the “total disaster to U.S. in-
terests in the Orient” with the Chinese Communist victory in 1949, which
Pawley traced to Washington’s pusillanimity, persuaded him that the United
States was engaged in a deadly struggle against an enemy far more cunning
and dangerous than the “Jap” militarists had ever been. Pawley absolved
George Marshall, one of his personal heroes, of all responsibility for the China
debacle, but he made no secret of his disdain for Dean Acheson and other
State Department ofªcials who Pawley believed were insufªciently militant in
their anti-Communism.30

First-hand exposure to the inner workings of government, even at a rela-
tively high level, had not tempered Pawley’s perspective. He continually in-
sisted that there was a Communist hand behind every ostensible setback to
American interests abroad. Most notably, he embraced the unswerving con-
viction that effective anti-Communist policies were perpetually being
thwarted by fuzzy thinkers—or subverted by “hidden mechanisms of disloy-
alty”—in the Department of State.31 Pawley believed that every country lost
to world Communism had been turned over by a variant of the State Depart-
ment’s “China hands.”32 Another facet of Pawley’s behavior that truly distin-
guished him in Washington, particularly in his relations with the State De-
partment, was his seeming inability to have differences over policy without
personalizing them and accusing those who disagreed with him of being
hopelessly naïve or worse. Although he belonged to the generation of the so-
called Wise Men—Dean Acheson, Robert Lovett, John McCloy—he could
never be confused with these pillars of the foreign policy establishment.

Pawley’s reputation as demanding, opinionated, and intemperate was
such that when President Truman wanted him to rejoin the State Department
for another stint in early 1951, it took a direct presidential order. With the
outbreak of a proxy war in Korea, Pawley once again seemed more prescient
than impetuous, and in February 1951 the president asked Pawley to become
an adviser on East Asian matters. Dean Acheson, who by this point was secre-
tary of state, objected in the strongest terms. When Acheson ªnally realized
he had no choice, he vowed to marginalize his unwanted special assistant. The
day Pawley reported to work he learned that Acheson had frozen him out of
the distribution scheme for East Asia policy papers. “I had not been sworn in

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30. By all indications, Pawley believed that Acheson’s policy amounted to “cowardly Communist con-
tainment,” to borrow a loaded phrase from the 1950s.

31. Pawley, Russia Is Winning, p. 7. The September 1960 testimony before Senator Eastland’s subcom-
mittee (the Communist Threat hearings) illustrates Pawley’s tendency to personalize disputes over pol-
icy.

32. Senate Subcommittee, Communist Threat, pp. 713–714, 727–728, 735–736.

to advise Acheson on our policy in Finland,” Pawley later wrote. Another man
might have resigned immediately, but Pawley was a resourceful bureaucratic
in-ªghter, and he surreptitiously arranged (via then Secretary of Defense
George Marshall) to receive copies distributed to the Pentagon of every im-
portant document produced by the State Department’s Policy Planning Staff.

The satisfaction of outmaneuvering Acheson lasted only a few months.
In late 1951 a disgruntled Pawley moved over to the Defense Department as a
special assistant to Secretary of Defense Robert Lovett, who put Pawley’s con-
siderable skills as a salesman and tough negotiator to good use. Pawley again
became a globe-trotting troubleshooter, and Lovett entrusted him with any
number of “nasty problems” involving the stationing of U.S. forces or
matériel overseas.33 Pawley’s ability to drive a hard bargain was one of his out-
standing skills, and he served as Lovett’s special assistant until September
1952.34

After 1952, Pawley never occupied an ofªcial post in the U.S. govern-
ment again. Yet during his seven years of off-and-on government service,
Pawley had managed to forge many relationships, including some friendships,
with men who remained in important positions in the government for de-
cades. Five of the foreign service ofªcers on his staff in Rio became U.S. en-
voys in their own right, earning a rank that was also Pawley’s preferred form of
address for the rest of his life: Ambassador.35 His assistant military attaché in
Brazil, Major Vernon Walters, served as deputy director of the CIA from 19

to 1976.36 These acquaintances gave Pawley information, inºuence, and
entrée into policymaking circles despite his lack of an ofªcial portfolio. Si-
multaneously, his knowledge of local elites in Latin America, along with his
eagerness to introduce them to up-and-coming, inºuential politicians like
George Smathers, kept Pawley involved in the making of foreign policy, de-
spite a dramatic shift in his political allegiances in November 1952—a shift
that seems to have much do with Pawley’s belief that Washington was being
much too passive about the Cold War.37

Private Sources of U.S. Foreign Policy

33. Pawley, Russia Is Winning, pp. 308–309. Among other duties, Pawley was a member of the defense
secretary’s delegation to the 1952 North Atlantic Treaty Organization (NATO) Conference in Lisbon;
negotiated base rights in France for U.S. forces; and forged an agreement with India that prevented
strategic minerals from being freely traded with the Soviet bloc.

34. Senate Subcommittee, Communist Threat, p. 712.

35. Smiley, “Private Wars,” p. 8; and Pawley, Russia Is Winning, p. 140.

36. Pawley was also well acquainted with Allen Dulles, the director of Central Intelligence from 19

to 1961; Lieutenant General Marshall “Pat” Carter, the deputy director of the CIA from 1962 to
1965; Colonel J.C. King, for many years the chief of the CIA’s Western Hemisphere Division in the
DD/P; and the various chiefs of the CIA’s JMWAVE station in Miami.

37. Senator Smathers (D-Florida) represented Pawley’s home state and was particularly inºuential in
Congress on U.S. policy toward Latin America in the 1950s and early 1960s, when the region more
often than not was considered a foreign policy backwater. Smathers was known as “the senator from

Recent scholarship has underscored that the Truman administration’s
policy of containment in Europe actually featured elements (namely, covert
action and psychological warfare) more commonly associated with an aggres-
sive strategy of rolling back Communist gains.38 By the ªnal years of the ad-
ministration, however, the “rollback” impulse had been displaced almost en-
tirely by a sober reformulation that bore Charles Bohlen’s imprint. According
to Gregory Mitrovich, Bohlen articulated a strategy based on the “rational
hope” that the Soviet Union would, if sufªciently contained, collapse at some
distant, unforeseeable point because of the system’s internal contradictions.39

In addition to adopting this more circumspect strategic doctrine, the Truman
administration had ªrmly committed itself to a policy of limited war on the
Korean peninsula.

The Truman administration’s strategy was anathema to Pawley, if only
because its approach favored patience and perseverance over rash action. To
Pawley’s way of thinking, this was a defeatist attitude, though it was also true
that Pawley’s thwarted personal ambitions were probably inseparable from his
criticism. He harbored bitter feelings toward many erstwhile colleagues in the
Foreign Service, and in the years to come he attributed all of Washington’s set-
backs in the early Cold War to the “terriªc errors of judgment” in the years
when the Democrats were in control (or to Democratic holdovers in the Ei-
senhower administration, who were present when Castro came to power in
1959).40 For these reasons, Pawley, heretofore an ardent internationalist Dem-
ocrat, broke party ranks in 1952 and publicly supported the Republican nom-
inee, Dwight Eisenhower.41 Pawley’s defection went beyond ideology. Political
campaign contributions were generally unregulated at the time, and Pawley

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Latin America” because of his persistent advocacy on all matters pertaining to the region, including
criticism of Washington for being indifferent to hemispheric affairs. Smathers visited Latin America at
least annually and often met with inºuential elites introduced to him by Pawley. The two men were of
like mind on almost every important issue concerning the region. See Pawley, Russia Is Winning,
pp. 151–158; Brian Lewis Crispell, Testing the Limits: George Armistead Smathers and Cold War Amer-
ica (Athens, GA: University of Georgia Press, 1999), pp. 94–98, 102; and Robert Sherrill, “The Power
Game: George Smathers, The Golden Senator from Florida,” The Nation, 7 December 1964, p. 427.

38. Among the ªrst scholars to demonstrate that Truman’s strategy of containment featured some ag-
gressive elements was Melvyn Lefºer in A Preponderance of Power: National Security Policy, the Truman
Administration, and the Cold War (Stanford, CA: Stanford University Press, 1992). The outstanding
work on this question is Gregory Mitrovich, Undermining the Kremlin: America’s Strategy to Subvert the
Soviet Bloc, 1947–1956 (Ithaca: Cornell University Press, 2000).

39. Mitrovich, Undermining the Kremlin, pp. 92–94.

40. William Pawley to Richard Nixon, 18 July 1960, in National Archives–Paciªc Region (NAPR),
Nixon Pre-Presidential Material, Series 320, Box 582, Pawley Folder.

41. Pawley, Russia Is Winning, pp. 323–324. How long Pawley had known Eisenhower by then is un-
clear, but the two men corresponded as early as 1947, the same year they visited Brazil together.
Pawley may have played a role in persuading Eisenhower to run, and to run as a Republican.

raised hundreds of thousands of dollars for the 1952 Republican ticket in ad-
dition to spearheading the “Democrats for Eisenhower” movement.42 Neither
task was a burden for the peripatetic businessman, who routinely made The
New York Times annual list of the ten highest salaried persons in America.43

The ªrst Republican presidency of the Cold War proved more Mani-
chean and moralistic in its approach to the global geopolitical struggle—if not
in actuality then certainly in rhetorical terms.44 There was also greater sympa-
thy in Republican circles for the view that U.S. investment abroad was the
cutting edge of the national interest and was therefore one of the ªrst targets
of Communist propaganda and calumny. More speciªcally, the Eisenhower
administration’s penchant for vigorous covert action dovetailed nicely with
the brisk, decisive approach Pawley favored in such matters. What heartened
Pawley most was that President Eisenhower turned repeatedly to him in the
1950s when Communism threatened to spread to the Western hemisphere—
America’s backyard and, no less signiªcantly, Pawley’s.45

Operation PBSUCCESS

Normally a sleepy international backwater, Guatemala by the early 1950s had
become a contested front in the struggle between the Soviet bloc and the
West. In the decade after 1944, the Communist movement in Guatemala had
grown from a few adherents in dictator Jorge Ubico’s prisons to a clandestine
nucleus of perhaps forty members in 1949 and to four thousand card-carrying
party members and several times that number of sympathizers by 1953.46 Ar-
guably, Communism by then carried as much appeal and inºuence in Guate-
mala as in any country outside the Soviet bloc, and the country was becoming
a focal point for Moscow to expand its inºuence in the Western Hemi-
sphere.47 Communists held “commanding positions” in the Guatemalan labor
movement (which in turn was afªliated with the Communist-controlled

Private Sources of U.S. Foreign Policy

42. Pawley raised a reported $250,000 for Dwight Eisenhower’s presidential campaigns in 1952 and
1956, which would translate into approximately $1.8 million in 2005 dollars. See “William D.
Pawley, Financier, Dies at 80,” p. 18.

43. Smiley, “Private Wars,” p. 8.

44. By 1955, as Mitrovich points out, a chastened Eisenhower administration essentially retreated to a
variation of Bohlen’s “doctrine of rational hope” as its strategy. Mitrovich, Undermining the Kremlin,
pp. 122, 163–169.

45. Pawley, Russia Is Winning, pp. 323–324.

46. See Schneider, Communism in Guatemala, esp. pp. 55–88, on the growth of the Communist
movement during this period.

47. Ibid., p. 1.

World Federation of Trade Unions), the Arbenz political coalition, and the
government itself, including key positions in certain strategic agencies.48 The
country was unmistakably heading leftward, and the “ascending curve of
Communist inºuence” merely increased after Arbenz came to power in
1951.

National and international media coverage of the increasingly conten-
tious relationship between Guatemala and the United States often conveyed
that story via the tribulations of the Boston-based United Fruit Company
(UFCO), whose domination of the Guatemalan economy was exceptional.
This focus became even more intense after the expropriation of some UFCO
holdings by the Arbenz government in February 1953 under land redistribu-
tion laws passed the previous year. To be sure, UFCO was a determined, even
reactionary, opponent of efforts to alleviate glaring economic inequalities in
Guatemala. Company executives had become alarmed as early as 1947 when
the government attempted to reform Guatemala’s labor laws, and they
promptly turned to the U.S. embassy for relief. When the embassy would go
only so far, UFCO retained (among many others, and at great expense) Ed-
ward Bernays, the so-called father of modern public relations, and Tommy
Corcoran, a “purveyor of concentrated inºuence,” to make its case at the
highest levels of the U.S. government and among the opinion-making elite.

Ultimately though, the travails of a prominent, inºuence-peddling U.S. cor-
poration were not the decisive factor in persuading Washington that the
Arbenz government posed a threat to U.S. interests.51 The dispositive element
was Guatemala’s drift toward becoming a beachhead for Soviet inºuence in
the hemisphere and the challenge it represented to American hegemony in a
neighboring region during the Cold War. Oddly enough, one of the main
sore points as far as Washington was concerned was the Arbenz government’s
gratuitous propagation of a lie manufactured in Communist propaganda
mills, namely, that the United States was using “germ warfare” in Korea.

Holland

48. Ibid., pp. 1–2, 183; and Blasier, Hovering Giant, p. 155.

49. “Notes of the Under Secretary’s Meeting,” 15 June 1951, in FRUS, 1951, Vol. II, pp. 1440–1442.
See also “Intelligence Report Prepared in the Ofªce of Intelligence Research,” 1 January 1953, in
FRUS, 1952–1954, Guatemala, pp. 56–66.

50. Cullather, Secret History, pp. 17–19. The description of Corcoran is from Fortune magazine.

51. As a 1952 letter to then Senator Richard Nixon from a mining engineer vividly illustrates, UFCO
was by no means the only business concern to alert the U.S. government about the leftward drift of
the Guatemalan government. Robert Sayre to Richard Nixon, 23 September 1952, in Richard M.
Nixon Library (RMNL), Pre-Presidential Series 11.217.1.

52. The Comité Nacional de la Paz (National Peace Committee), the principal vehicle for propagating
Communist propaganda in Guatemala, was afªliated with the Soviet-funded World Peace Council
and succeeded in getting the ªlm “Bacteriological Warfare in Korea” shown in government-run
schools. Complementary allegations appeared in ofªcial publications of the Guatemalan government.
See “Support Material on Guatemala with Attachment [Soviet Communism in Guatemala],”

“They [the United States] would have overthrown us even if we had grown no
bananas,” concluded José Manuel Fortuny, a Guatemalan Communist Party
leader, many years after the 1954 coup.53

Although documentation is unavailable, Pawley likely was aware, given
his job in the Pentagon and his contacts within the CIA and State Depart-
ment, of the debate within the Truman administration in the summer of
1952 over what, if anything, to do about the Arbenz government. Pawley may
even have been aware of the September 1952 decision to overthrow Arbenz by
force.54 But less than a month after the CIA was given the go-ahead for the co-
vert operation PBFORTUNE, Secretary of State Dean Acheson received
word that the U.S. hand was already visible. This disclosure prompted him to
terminate U.S. support for a coup d’état. The State Department had consis-
tently expressed deep reservations about the idea, if only because any exposure
of a U.S. role threatened to undo what was left of the “Good Neighbor” pol-
icy initiated by the Roosevelt administration.

When the Eisenhower administration took ofªce in January 1953, the
top ofªcials realized that the Arbenz government was an unresolved problem.
Two of the most important ªgures in the new government—Under Secretary
of State Walter Bedell Smith and CIA Director Allen Dulles—were Truman
holdovers, having served in the CIA when Operation PBFORTUNE was
mounted. Dulles, in fact, was the ªrst to broach the notion of bringing Wil-
liam Pawley back inside the new administration, knowing full well that
Pawley would be an energetic proponent of doing something if given the
smallest opening to express his opinion and exercise his inºuence.

Apparently unbeknownst to Pawley—for he makes no mention of it in

49
Private Sources of U.S. Foreign Policy

unclassiªed paper, 30 June 1954, in CIA Guatemala ERR; Translation, “Diario de Centro-America,”
12 July 1952, in RMNL, Pre-Presidential Series 11.217.4; and Schneider, Communism in Guatemala,
p. 255. Regarding the germ warfare allegation, perhaps the most successful disinformation operation
during the early Cold War, see Kathryn Weathersby, “Deceiving the Deceivers: Moscow, Beijing,
Pyongyang, and the Allegations of Bacteriological Weapons Use in Korea,” Cold War International
History Project Bulletin, Issue No. 11 (March 1998), pp. 176–185; and Milton Leitenberg, “New Rus-
sian Evidence on the Korean War Biological Warfare Allegations: Background and Analysis,” Cold War
International History Project Bulletin, Issue No. 11 (March 1998), pp. 185–200.

53. Quoted in Gleijeses, Shattered Hope, p. 366. In his deªnitive if tendentious history, Gleijeses also
makes the point that ofªcial U.S. reporting actually underestimated the extent of Communist
inºuence during the Arbenz years.

54. Cullather, Secret History, p. 29. Allen Dulles, then the deputy CIA director, received explicit ap-
proval for the covert action from Under Secretary of State David Bruce in September 1952.

55. “Note re Guatemala 1954 coup,” 21 March 1955, in CIA Guatemala ERR. In addition to the
threat of exposure, the imminence of the presidential election seems to have persuaded Acheson to
scrap PBFORTUNE. The last ten months of the Truman administration were a “virtual interreg-
num,” in Acheson’s words, and he may have concluded that any dramatic departure from established
policy ought to be decided by the incoming administration, which would have to contend with any
consequences. See Douglas Brinkley, Dean Acheson: The Cold War Years, 1953–71 (New Haven, CT:
Yale University Press, 1992), p. 6.

his memoir—in March 1953, as the Eisenhower administration was contem-
plating practical ideas for combating Communism in the hemisphere, Allen
Dulles put forward the idea of appointing Pawley as a special presidential em-
issary to Central America. Dulles’s memorandum to Under Secretary Smith
on 8 March provides another illustration of how U.S. investments and busi-
ness executives abroad functioned as a warning system about hostile develop-
ments. In the document, Dulles recounted to Smith that he had been visited
recently by two American citizens “who have large [economic] interests in the
country.”56 The businessmen “indicated that they did not feel they could get
anything whatever out of the [U.S.] embassy in the way of protection of
American interests, and hinted at darker things.” Rudolf Schoenfeld, the U.S.
ambassador to Guatemala, was a conventional career diplomat and too
“timid,” according to Dulles. The administration should thus consider “send-
ing a two-ªsted guy to the general area on a trip of inspection and to report to
the president.”57 Pawley “or someone of his type might be considered,” sug-
gested Dulles. “I recognize that Pawley is hard to control, but he is fearless
and gets things done even though he may break a little crockery in doing it.”

Such a mission did occur in 1953, although Pawley was not the person chosen
to undertake it. Instead, President Eisenhower sent his brother, Milton Eisen-
hower, then president of Pennsylvania State University, on a tour of the hemi-
sphere as a special envoy. Milton Eisenhower was a far more conciliatory
ªgure than Pawley, and the focus of his survey was not exclusively Central
America—a survey that might have raised eyebrows—but the situation in all
of Latin America.

By the late summer of 1953, the situation in Guatemala had only wors-
ened from Washington’s perspective. The sole remaining obstacle to a full-
scale Communist takeover, it appeared, was the Guatemalan armed forces. A
long-time axiom of Guatemalan politics was that “although the army does not
govern, in the last analysis it determines who does.”60 When it appeared that
the army would not rise against Arbenz spontaneously, the Eisenhower ad-
ministration decided to induce the military to act before it, too, become pene-

50
Holland

56. Although Dulles does not identify the businessmen, they do not appear to be from UFCO.

57. Dulles’s exact observation was that Schoenfeld is “timid [having] never recovered from his treat-
ment at the hands of Ana Pauker.” Before his posting in Guatemala, Schoenfeld had been U.S. ambas-
sador to Romania, where Ana Pauker, a notorious Stalinist, had served as foreign minister. (Pauker
herself later fell victim to the Stalinist purges.)

58. “Memorandum re PBFORTUNE,” 8 March 1953, in FRUS, 1952–1954, Guatemala, p. 79. As
noted earlier, the Dulles memorandum to Walter Bedell Smith is one of the two newly declassiªed
documents that refer to Pawley.

59. Eisenhower, White House Years, p. 149; and Cook, Declassiªed Eisenhower, pp. 257–258.

60. John Gillin and K.H. Silvert, “Ambiguities in Guatemala,” Foreign Affairs, Vol. 34, No. 3 (April
1956), p. 479.

trated by Communists, hopelessly compromised, or no longer the ªnal arbiter
of who ruled.61 Of equal signiªcance, by mid-August 1953 a roughly compa-
rable situation in Iran had just been resolved to Washington’s great satisfac-
tion via covert action. Operation TPAJAX, a joint effort by British and Amer-
ican intelligence operatives, had resulted in the overthrow of Mohammad
Mosadeq, a prime minister deemed hostile to Western interests. The coup in
Iran also led to the decimation of the Communist Tudeh Party, the installa-
tion of a new, pro-Western government, and the restoration of the shah’s au-
thority.62 The Eisenhower administration viewed this clandestine activity as a
potent new weapon in the Cold War (and perhaps even a “foreign policy pan-
acea”) and was eager to bring it to bear in Guatemala.63 The CIA was only too
glad to oblige. Allen Dulles believed that espionage, and the related business
of generating intelligence estimates, were too cheaply obtained by Washing-
ton standards. The amount of money they required would never command
enough respect on Capitol Hill for the relatively new CIA. If the agency was
ever going to amount to anything, it needed to command a real budget mea-
sured in the tens of millions of dollars. The fastest way to do that was to cor-
ner the “legitimate and growing market for covert action.”

In August 1953 the administration’s Psychological Strategy Board (PSB)
authorized the CIA director to begin planning covert operations against the
Arbenz regime that would culminate in his downfall. The plan, dubbed
PBSUCCESS, was assigned an “extremely high operational priority” by the
Eisenhower administration.65 Because the basic concept was to prod the Gua-
temalan army into action rather than bringing about Arbenz’s removal
through a bloody civil war and sheer force of arms, PBSUCCESS was consid-
ered primarily an operation in psychological warfare.

Private Sources of U.S. Foreign Policy

61. “Memo to Frank Wisner with Attachment,” 26 July 1954, in CIA Guatemala ERR. A National
Intelligence Estimate (NIE), the consensus opinion of the U.S. intelligence community, was issued on
19 May 1953 concerning Guatemala, and this estimate (NIE-84) provided the grounds for planning
what became Operation PBSUCCESS. Washington feared that the Guatemalan ofªcer corps would,
over time, be subject to Communist inºuence through forced retirements, intimidation, or transfers;
that anti-Communist ofªcers might be placated or corrupted; and ªnally that the Arbenz regime
might arm a left-wing militia that could outºank the army.

62. Mark Gasiorowski and Malcolm Byrne, eds., Mohammad Mosaddeq and the 1953 Coup in Iran
(Syracuse, NY: Syracuse University Press, 2004).

63. Helms, A Look over My Shoulder, p. 117.

64. Ibid., pp. 105–106.

65. FRUS, 1952–1954, Guatemala, pp. 86–87.

66. Further indication of the emphasis on psychological as opposed to actual warfare can be found in
animated discussions over whether to authorize more intense air-to-ground bombing after the inva-
sion commenced. There was great reluctance to permit direct attacks on the Guatemalan military be-
cause it was feared that such bombings would alienate and antagonize the Guatemalan army and rouse
it to defend the Arbenz government. “Telegram from the Central Intelligence Agency to Operation
PBSUCCESS Headquarters in Florida,” 19 June 1954, in FRUS, 1952–1954, Guatemala, pp. 350–

On 16 May 1954, nine months into the planning, President Eisenhower
called Pawley at his Miami Beach home and asked him to come to Washing-
ton immediately on an urgent and conªdential matter.67 Thus began Pawley’s
three-month involvement in what he would later describe as “Strangling a
Red Dictatorship in Guatemala.”68 Analysts who have reconstructed the coup
have all but neglected Pawley’s behind-the-scenes contribution.69 The lack of
attention is not surprising insofar as considerable efforts were made to keep
his involvement under wraps. Even basic records, like the president’s appoint-
ment log, were doctored so that visits with Pawley would go unrecorded.

Other records would never be created at all. By temperament and inclination,
Pawley was well suited for such clandestine work. Out of sheer habit, and dat-
ing back to his days as a traveling salesman in South America, he was adept at
“working out of his pockets” and not putting things down in ofªcial memo-
randa.

Pawley arrived in Washington late on the evening of 17 May and imme-
diately entered into discussions with the two men who met him at National
Airport: Henry Holland, the assistant secretary of state for inter-American af-
fairs since March, and Walter Donnelly, a former U.S. ambassador to Costa
Rica, Venezuela, and Austria, who had resigned from government service in
January 1953 to become U.S. Steel’s Latin American representative stationed

52
Holland

351; “Telegram from the Central Intelligence Agency to the CIA Station in Guatemala,” 20 June
1954, in FRUS, 1952–1954, Guatemala, p. 358; and “Telegram from the Central Intelligence Agency
to Operation PBSUCCESS Headquarters in Florida,” 20 June 1954, in FRUS, 1952–1954, Guate-
mala, p. 361.

67. Pawley, Russia Is Winning, p. 330. The phone call is not documented in the extant record. Rather,
a memorandum of conversation between Secretary Dulles and President Eisenhower on 19 May,
Dulles proposes that a special committee, consisting of Milton Eisenhower, Donnelly, and Pawley, ad-
vise the administration on how to invoke the Caracas Resolution at an upcoming meeting of the Or-
ganization of American States (OAS). Dulles makes no mention of having the group evaluate Opera-
tion PBSUCCESS, whereas Pawley speciªcally indicates that he was given this additional task. The
date given in Pawley’s memoir for the telephone call, 16 May, was one day after the M/V Alfhem ar-
rived in Puerto Barrios, Guatemala, with 2,000 tons of Czechoslovak weapons. The landing was pub-
licly disclosed by Secretary of State Dulles on 17 May. “Memorandum of Conversation with the Presi-
dent, by the Secretary of State,” 19 May 1954, in FRUS, 1952–1954, Vol. IV, pp. 1116–1117.

68. The quotation is taken from the title to chapter XI in Russia Is Winning.

69. Gleijeses, in the best account that draws from the most sources, foreign and domestic, makes no
mention of Pawley’s role; neither does Immerman or Cullather in two other works wholly devoted to
the 1954 coup. The ªrst book to refer to Pawley’s role was Wise and Ross, Invisible Government,
p. 171. The authors mention a “former high United States diplomat” brought in by Eisenhower to
serve as “secret civilian adviser,” but they do not identify Pawley by name. The 1974 NACLA volume
was the ªrst to identify Pawley as the secret adviser. Schlesinger and Kinzer, Bitter Fruit, p. 145; and
FRUS, 1952–1954, Vol. IV, describe Pawley as a key adviser during PBSUCCESS but primarily in the
context of the State Department’s Guatemalan Group and as a liaison to the Defense Department.

70. According to James Leyerzapf, DDE Library archivist, Eisenhower archivists have found, albeit
rarely, “suggestive evidence in documents that there were unrecorded visits.” James Leyerzapf, personal
communication, 7 June 1999.

71. Smiley, “Private Wars,” p. 28.

in Caracas. The three men stayed up until 2:00 a.m. in Washington’s
Mayºower Hotel discussing Guatemala. Pawley could barely contain his ex-
citement at the “scent of real action,” his ªrst since the “Flying Tiger” days.72

Holland informed Pawley that the Eisenhower administration had ªnally de-
cided that the “time had arrived” (as Secretary of State John Foster Dulles put
it) to settle the Guatemala problem before the Central American country be-
came a “denied area.”73

Holland explained that the president wanted an independent evaluation,
by knowledgeable persons whose judgment and discretion he trusted, of the
CIA plan to depose President Arbenz using a band of insurgents under the
leadership of Colonel Carlos Castillo Armas.74 With Eisenhower’s approval,
the non-paramilitary elements of PBSUCCESS were already under way. But
it was the paramilitary aspects that were the most troubling, controversial,
and risky. What were the true capabilities of the insurgents? What else would
Castillo Armas need to mount a successful coup? The president wanted
Pawley and Donnelly to participate in the evaluation committee, along with
Milton Eisenhower, based on his earlier survey of U.S. relations with Latin
America.

Before the committee could get started, Milton Eisenhower’s wife learned
she had cancer, forcing him to withdraw from the project. Eventually, Don-
nelly would also bow out. Donnelly believed it was incumbent on him to in-
form U.S. Steel about his proposed involvement in a covert task so that the
corporation could weigh the implications of disclosure. According to Pawley,
U.S. Steel executives reluctantly decided that Donnelly’s usefulness in the re-
gion would be compromised should his role surface. He had to choose be-
tween his lucrative job and the mission, and he chose the former.75 In the end,
the evaluation committee came down to Pawley alone.

Before Donnelly stepped down, he and Pawley occupied ofªces in the

53
Private Sources of U.S. Foreign Policy

72. Pawley, Russia Is Winning, p. 330.

73. “Memorandum of Conversation, by the Secretary of State,” 11 May 1954, in FRUS, 1952–1954,
Vol. IV, p. 1106; and “Cable to Director from LINCOLN,” 2 March 1954, in CIA Guatemala ERR.

74. Allen Dulles was initially given this task in August 1953, and he approved the DD/P’s
PBSUCCESS plan on 9 December 1953. Thus the covert operation was in the works well before
Pawley was contacted by the president. Subsequently, so many rumors about U.S. preparations began
to circulate that Assistant Secretary of State Holland demanded a “top-level review” of the project on
10 April 1954. According to Cullather, the Dulles brothers gave the “full green light” on 17 April,
weeks before Pawley was contacted. But until the Czechoslovak weapons shipment arrived, there was
always a chance that Holland or another State Department ofªcial would “pull the plug on
PBSUCCESS.” Full operational readiness was not anticipated until mid-June. Cullather, Secret His-
tory, pp. 81–82, 129–131. According to Evan Thomas, who had privileged access to classiªed histo-
ries, President Eisenhower did not give his ªnal approval until 15 June. See Thomas, Very Best Men,
p. 119.

75. Pawley, Russia Is Winning, p. 332.

State Department next to those of Henry Holland and held daily sessions to
review PBSUCCESS. These meetings were attended by either Allen Dulles or
Frank Wisner, the deputy director for plans, and CIA facilities were put at the
disposal of Donnelly and Pawley. The two men also received help from
Thruston Morton, the assistant secretary of state for congressional relations,
and John Peurifoy, the U.S. ambassador to Guatemala who had replaced
Rudolf Schoenfeld in November 1953. In “Jack” Peurifoy, Pawley found a fel-
low Carolinian and certainly a kindred soul. Peurifoy was every bit as blunt
and tough an anti-Communist as Pawley, having come to Guatemala after a
three-year tour in Greece.

It is impossible to know whether the recommendation from the “com-
mittee” to the president would have been different if Milton Eisenhower had
been involved. The president may have intended to have his brother’s and
Pawley’s views balance each other out, leaving Donnelly as the deciding
vote—assuming that the president was willing to accept a less-than-unani-
mous judgment.76 But it was not surprising when Pawley reported to the pres-
ident that the “Castillo Armas movement” merited full U.S. support.77 In-
deed, even if the Castillo Armas movement had not existed, Pawley would
undoubtedly have called for it to be set up.

Having endorsed the plan, Pawley now thrust himself into making it suc-
ceed. In his most open but non-public guise, he began to attend meetings of
what was known inside the State Department as the “Guatemalan Group,” an
ad hoc committee of mid-level ofªcials working on diplomatic and other
overt aspects of the crisis.78 These ofªcers initially were responsible for devis-
ing a U.S. strategy for hemispheric action against the Arbenz regime through
the Organization of American States (OAS). 79 Although most of the ofªcers
were unaware of the CIA’s backing of Castillo Armas’s forces, the Guatemalan
Group was supposed to exert maximum diplomatic pressure on the Arbenz

Holland

76. Given that Allen Dulles suggested Pawley evaluate the situation in 1953, it seems plausible that he
also recommended Pawley to the secretary of state and/or president in May 1954, knowing full well
that Pawley would almost certainly favor Dulles’s penchant for covert action.

77. Pawley, Russia Is Winning, p. 333.

78. Initially, the Guatemalan Group consisted of seven of Holland’s top deputies: Edward Cale, direc-
tor of the Ofªce of Regional American Affairs; Rollin Atwood, director of the Ofªce of South Ameri-
can Affairs; Charles Burrows, director of the Ofªce of Middle American Affairs; John Dreier, ambassa-
dor to the OAS; Edward Jamison, deputy director of the Ofªce of Regional American Affairs; and
Raymond Leddy, ofªcer in charge of Central American and Panama Affairs, Ofªce of Middle Ameri-
can Affairs.

79. In March 1954 the OAS had adopted the Caracas Resolution, directed at Guatemala, during the
Tenth Inter-American Conference. The resolution condemned the spread of international Commu-
nism to the Western hemisphere. Gleijeses, Shattered Hope, ch. 12; and Wood, Good Neighbor Policy,
pp. 175–185.

regime in concert with the planned insurrection.80 The ªrst of nineteen Gua-
temalan Group meetings occurred on 10 May in Assistant Secretary Holland’s
ofªce a few days before Pawley came on board. As the crisis progressed, the
group was enlarged to as many as seventeen ofªcials, including Pawley (and
Donnelly initially), Frank Holcomb representing the CIA, and numerous
State Department representatives.81 New tasks were also continuously added
as the crisis progressed, including pleading the U.S. case (and countering
Guatemala’s positions) in international settings.82

With other members of the Guatemalan Group, Pawley engaged in some
of the social diplomacy for which he was well known in Washington. In 1941,
he had built a ten-room house in Miami Beach, which he considered home
even though he rarely lived there for the next thirty years; it was more like a
base of operations. To stay involved in Washington, Pawley knew he had to
maintain a physical presence there. So he also kept an 800-acre farm estate in
The Plains, Virginia, only an hour’s drive from the capital, where he could en-
tertain and keep in touch with important U.S. and foreign ofªcials on a ªrst-
name basis.83 A typical weekend might ªnd a general from the Pentagon, or
J.C. King from the DD/P, hunting wild game and socializing with Latin
American ambassadors and select State Department ofªcials. During the Ei-
senhower years, Pawley grew particularly close to Vice President Richard
Nixon because of their shared views of the Communist threat in Latin Amer-
ica and their sense that it was not being addressed with sufªcient vigor and
skill.84

55
Private Sources of U.S. Foreign Policy

80. Ofªcials in the State Department knowledgeable about PBSUCCESS included Secretary of State
John Foster Dulles; Under Secretary Walter Bedell Smith; Assistant Secretary of State Henry Holland;
Deputy Assistant Secretary Thomas Mann; the U.S. ambassadors to Guatemala (John Peurifoy), Nica-
ragua (Thomas Whelan), and Honduras (Whiting Willauer); and Raymond Leddy, the ofªcer in
charge of Central American affairs. After receiving a clearance in August 1953, just as planning for
PBSUCCESS began in earnest, Leddy attended weekly meetings held by the DD/P in the months
leading up to Castillo Armas’s attack. “No other echelons or personalities” in the State Department’s
American Republics bureau were witting, though some ofªcers undoubtedly had their suspicions.
“SUBJECT: PBFORTUNE—Meeting with DD/P,” 19 August 1953, in FRUS, 1952–1954, Guate-
mala, pp. 89–90.

81. Wood, Good Neighbor Policy, p. 255. FRUS, 1952–1954, Vol. IV, notes that the Guatemalan
Group met almost daily during May, June, and early July 1954, but it provides minutes only from the
meetings on 10 May, 9 June, 16 June, 23 June, and 25 June. Other State Department ofªcers who be-
came involved included Norman Pearson, William Wieland, Francis Herron, Robert Woodward, Wil-
liam Warren, and Edward Sparks. A Colonel Clark, presumably from the Pentagon, also attended.
The ªrst Guatemalan Group meeting that Pawley attended was on 9 June.

82. On the diplomatic maneuvering in the U.N. Security Council, see Blasier, Hovering Giant, p. 169.

83. Smiley, “Private Wars,” p. 8; and Pawley, Russia Is Winning, p. 335A.

84. Pawley’s relationship with Nixon was similar to his political friendship with George Smathers. A
January 1955 memorandum describes Pawley’s effort to have Nixon meet with a small group of “very
staunch Eisenhower-Nixon supporters” during an upcoming visit to Mexico. Pawley advised Nixon

Following the arrival of Czechoslovak weapons in Guatemala aboard the
M/V Alfhem in mid-May 1954, the Guatemalan Group concentrated much
of its effort on trying to induce the OAS to pass a tougher statement than the
Caracas resolution adopted in March. The new declaration called on Guate-
mala to “eliminate agents and collaborators of the International Communist
movement.”85 As Pawley recounts in his unpublished memoir:

Our farm at The Plains offered a relaxed setting for a friendly exchange of views
with leaders of our Latin neighbors. Edna [Mrs. Pawley] and I arranged a lun-
cheon at our Virginia home, “Belvoir,” on June 13th for a distinguished guest
list which included ambassadors from Argentina, Brazil, Colombia, Costa Rica,
Cuba, Dominican Republic, El Salvador, Nicaragua, Venezuela, and six Ameri-
can dignitaries. A week later, we held another, larger luncheon in honor of assis-
tant secretary of state and Mrs. Henry Holland, which was attended by ªve
more key Latin American ambassadors and their wives, and by more than a
dozen of our diplomatic and military ofªcials and their wives.

It was to prove a wise “investment.”86

Wholly separate from the Guatemalan Group, Pawley and Donnelly (un-
til his departure) worked on many tasks of a diplomatic, military, and intelli-
gence nature directly related to the pending confrontation with the Arbenz re-
gime, with full knowledge of what was in the ofªng.87 These projects included
the evacuation of Arbenz sympathizers and supporters after the coup, recogni-
tion of a new government, and possible economic and military aid to the suc-
cessor government. Pawley labored with a variety of representatives from the
CIA, Defense Department, and State Department to draft these plans.
Among other things, Pawley was active in Operation HARDROCK BAKER,
the organization of U.S. naval surveillance in the Caribbean to prevent a re-
currence of the Alfhem landing.88 With little of the public fanfare that at-
tended the blockade imposed against Cuba eight years later, the Eisenhower

Holland

that the Mexican ªnance minister would be in attendance, along with a Mexican lawyer who was a
former partner of Henry Holland, the Texas attorney who was then serving as assistant secretary of
state. These “two [Mexican] men will have more to say about relations with us (United States) than
any other two in Mexico.” “Memo re Pawley Telephone Call,” 31 January 1955, in NAPR, Nixon Pre-
Presidential Material, Series 320, Box 582, Pawley Folder.

85. “Notes of a Meeting of the Guatemalan Group, Held in the Department of State,” 9 June 1954,
in FRUS, 1952–1954, Vol. IV, pp. 1160–1161.

86. Pawley, Russia Is Winning, p. 335A. All these countries except Argentina generally supported the
U.S. diplomatic position throughout the crisis. See, for example, the list of countries that seconded
Washington’s call for an emergency foreign ministers’ meeting. Walter Waggoner, “U.S. and 9 Others
Seek Treaty Talk about Guatemala,” The New York Times, 27 June 1954, p. 3.

87. “The Second Secretary of Embassy in Guatemala (Hill), Temporarily in Washington, to the Am-
bassador in Guatemala (Peurifoy),” 30 May 1954, in FRUS, 1952–1954, Vol. IV, pp. 1152–1154.

88. “The Secretary of State to the Secretary of the Navy (Thomas),” 12 June 1954, in FRUS, 1952–
1954, Vol. IV, pp. 1165–1167; Gleijeses, Shattered Hope, p. 312; and Cullather, Secret History, p. 82.

administration cordoned off Guatemala for the duration of the crisis to fore-
stall any more Soviet matériel aid to Arbenz. Working out of his ofªce at the
State Department, Pawley met with the chief of naval operations and helped
him decide where to station U.S. naval forces to intercept potential deliveries
to Guatemala.89 The Gulf of Honduras quarantine, in place by 24 May, in-
cluded the inspection of ship cargoes and diversion of suspect ships to Pan-
ama, actions that did not sit well with several countries, including normally
staunch U.S. allies such as Britain and the Netherlands.90

Another even more sensitive aspect of Pawley’s involvement was his role
in fashioning the size and composition of Castillo Armas’s ºedgling air force
prior to the coup. Not coincidentally, this was the key paramilitary issue in
PBSUCCESS. The air arm had to be sufªciently effective to matter but not so
large or modern as to attract unwanted attention.91 Pawley’s thorough knowl-
edge of aviation, it was thought, would enable him to strike this delicate bal-
ance. He worked on constituting Castillo Armas’s air arm with Richard
Bissell, Dulles’s special assistant for the planning and coordination of
PBSUCCESS, and alongside H. Struve Hensel, the assistant secretary of de-
fense for international security affairs, whose ofªce was in charge of all U.S.
military aid programs. Besides ªguring out the conªguration of the air wing,
and the logistics involved in getting the planes to Nicaragua in working order,
the three men had to determine how to transfer the surplus aircraft in a man-
ner consistent with provisions of the Mutual Security Act.92

The pre-invasion debate over the size of the rebels’ air arm was intense.
Pawley, drawing on his extensive experience with the operations of the “Flying
Tigers,” initially supported the recommendation of Nicaraguan President
Anastasio Somoza to provide as many as ten single-engine ªghter-bombers to
Castillo Armas.93 (Nicaragua had agreed to be the base for launching air oper-
ations and to function generally as a channel between the Pentagon and

Private Sources of U.S. Foreign Policy

89. Pawley, Russia Is Winning, p. 336; and Cook, Declassiªed Eisenhower, p. 382.

90. “The Second Secretary of Embassy in Guatemala (Hill), Temporarily in Washington, to the Am-
bassador in Guatemala (Peurifoy),” 30 May 1954, in FRUS, 1952–1954, Vol. IV, pp. 1152–1154; Ei-
senhower, Mandate for Change, pp. 424–425; and Grose, Gentleman Spy, pp. 379–380.

91. The sensitivity of this issue was amply illustrated when the CIA faced an “aircraft disposition prob-
lem” following PBSUCCESS, as reºected in several agency cables. “Aircraft could bear close scrutiny
but would only engender additional questions which could be most embarrassing, i.e., how many [air-
craft] involved, where obtained, how armed, who ºew, who bombed this target or that target, etc. Ac-
ceptable answers to these questions would require elaborate story which all would have to stick to and
which could stand up under detailed investigation sure to follow. . . . Let this issue die if possible by
having air power disappear.” Quoted from “Cable to director from LINCOLN,” 1 July 1954, in CIA
Guatemala ERR; and “Disposal of Airplanes,” 9 July 1954, in CIA Guatemala ERR.

92. “Notes on Meeting with Messrs. Pawley and Hensel,” 8 June 1954, in CIA Guatemala ERR.

93. Pawley identiªes the Nicaraguan president as Luis Somoza, but this son of Anastasio Somoza did
not become chief of state until 1956.

Castillo Armas’s air force.) Pawley harbored a vivid recollection of how the
AVG pilots had damaged more than half of their P-40 ªghters in training ac-
cidents, long before they entered combat over China. Pawley believed the
greater danger was in having too few planes rather than too many, but he
found himself in a “heated debate” with Allen Dulles on this very point. The
CIA director considered Somoza’s request excessive and “stubbornly in-
sist[ed]” that just three aircraft could do the job.94 Pawley argued that this rep-
resented “miserably inadequate air support” and that “an underestimation of
the aircraft needs of the Guatemalan liberation force could be fatal to our [sic]
mission.”95 Presumably, Dulles worried that Washington’s plausible deniabil-
ity would be at risk if Castillo Armas showed up with ten ªghter-bombers,
even if they were of World War II vintage. According to Pawley, the decision
was his to make and not Dulles’s. Yet Pawley ªnally yielded, much against his
better judgment.96

Castillo Armas’s land forces crossed into Guatemala from Honduras on
18 June 1954. Just as Pawley feared, two of the three F-47 Thunderbolt
ªghter-bombers in the colonel’s air force were out of commission after two
days of combat.97 Colonel Albert Haney, the Florida-based military opera-
tions chief of PBSUCCESS, conveyed the bad news to Allen Dulles by tele-
phone on 20 June. With the success or failure of PBSUCCESS seeming to
hang in the balance, Haney urgently appealed to Dulles for replacement air-
craft, and the next day Dulles and his top advisers debated the request.98

Frank Wisner, who had worried incessantly over furnishing any aircraft to
Castillo Armas in the ªrst place, seemed prepared to see the CIA’s largest co-
vert operation to date fail rather than risk exposure by providing more combat
planes.99 Richard Bissell, Dulles’s special liaison, later recalled that Wisner was

58
Holland

94. Regarding the transfer of three F-47s via Nicaragua, see “Telegram from the Central Intelligence
Agency to Operation PBSUCCESS Headquarters in Florida,” 12 June 1954, in FRUS, 1952–1954,
Guatemala, p. 323; “Purchase of Airplanes in Connection with Project PBSUCCESS,” 5 October
1954, in CIA Guatemala ERR; and “Memo re F-47 aircraft,” 20 January 1955, in CIA Guatemala
ERR.

95. Pawley, Russia Is Winning, pp. 336–337.

96. Ibid., p. 337. For an early description of how the air force for Castillo Armas was assembled clan-
destinely, see Schlesinger and Kinzer, Bitter Fruit, pp. 115–116.

97. Pawley, Russia Is Winning, p. 338. The F-47 was the postwar designation for the World War II–era
P-47 Thunderbolt. According to Thomas, two planes were shot down by small-arms ªre, and one
crash-landed in Mexico after running out of gas. Thomas, Very Best Men, p. 119. Ultimately, the num-
ber of aircraft that would be used in PBSUCCESS totaled twelve: three C-47 (DC-3) cargo planes, six
F-47 Thunderbolt ªghter-bombers, one P-38 Lighting ªghter-bomber, one Cessna 180, and one
Cessna 140.

98. Schlesinger and Kinzer, Bitter Fruit, pp. 173–175.

99. According to Thomas, DD/P Frank Wisner initially opposed creation of a rebel air force because
he feared it “would blow the agency’s cover.” He even threatened to resign over the issue at one junc-
ture. See Thomas, Very Best Men, p. 118.

“almost fatalistic,” seemingly prepared to let the cards fall where they may.
Dulles, by contrast, was willing to up the ante even at the risk of exposing the
CIA’s instrumental role: “He felt that the agency’s reputation and his own
were at stake and he intended to ªght for both with all his ability and deter-
mination.”100 Pawley uncharacteristically resisted the temptation to say “I told
you so,” according to his memoir. All that mattered now was making extra
planes available, as Dulles was inclined to do. But that required the concur-
rence of the State Department.101

On the morning of 22 June, Allen Dulles and Pawley went to Assistant
Secretary of State Holland’s ofªce. Dulles carried in his hand an overnight
CIA dispatch from LINCOLN, the code name for the agency’s command
post in Opa-Locka, Florida. Colonel Haney had written that it was “abso-
lutely essential to have [the additional] planes. Now operating on complete
shoestring and miracle that performance has been possible.”102 To Dulles’s and
Pawley’s great chagrin, however, Holland was unmoved. He had opposed the
paramilitary aspects of PBSUCCESS from the outset as “dishonorable” and
now rebuffed the request for three additional aircraft.103 Holland argued that
“we were in the clear when we originally supplied the arms to Nicaragua for
use by Castillo Armas’s forces. But now that a civil war exists in Guatemala,
it’s a new ball game—we’re bound by treaty not to intervene.”104 Pawley had
never seen Dulles lose his temper before, but the CIA director now lost his
composure, shouting “Dammit, I can’t work like this!”105

Further sparring with Holland proved futile, but neither Dulles nor
Pawley was ready to countenance defeat. They accepted Holland’s suggestion
to take the dispute to the highest level in the State Department. In the ab-
sence of Secretary of State Dulles, that meant Under Secretary Walter Bedell
Smith.106 Holland, armed with three law books, was adamant and repeated his
argument: A shipment of aircraft now would be a clear-cut treaty violation by

59
Private Sources of U.S. Foreign Policy

100. Bissell, Reºections, p. 87.

101. Pawley’s account differs in some details from Richard Bissell’s version, and both memoirs differ
from the story presented in Bitter Fruit. Pawley wrote that he, Holland, and Dulles went to see Robert
Murphy, the deputy under secretary of state, whom Pawley inaccurately identiªes as acting secretary in
the absence of John Foster Dulles. Bissell’s memoir indicates that he and Holland went to see Under
Secretary Smith in Dulles’s absence. Bissell, Reºections, p. 87. The authors of Bitter Fruit contend that
Allen Dulles, along with Bissell and Frank Wisner, went to the State Department and met with Smith
and Holland. Schlesinger and Kinzer, Bitter Fruit, p. 175.

102. “Cable to Director from Lincoln,” 22 June 1954, in CIA Guatemala ERR.

103. “Minutes of Weekly PBSUCCESS Meeting,” 21 April 1954, in CIA Guatemala ERR.

104. Pawley, Russia Is Winning, p. 339.

105. Ibid.

106. According to Bissell, Smith was “the ofªcial [State Department] liaison with whom we dealt on
an almost hour-by-hour basis.” Bissell, Reºections, p. 87.

the United States. Dulles and Pawley countered that PBSUCCESS would
probably fail if Castillo Armas did not receive more aircraft and that the presi-
dent had committed himself to taking whatever steps were necessary to pre-
vail. “If it [PBSUCCESS] fails, the ºag of the United States has failed,” Eisen-
hower had reportedly said on the eve of the invasion.107 Heeding the
admonitions of Dulles and Pawley, Smith overruled Holland, but the assistant
secretary requested that they take the matter to the president. Possibly because
Holland was relatively new on the job, Smith agreed, although it was gener-
ally understood that few people were better than Smith himself at anticipating
the president’s mindset.108

Given the urgency of the situation, the trio of Dulles, Holland, and
Pawley received a prompt hearing at the White House, entering the Oval
Ofªce at 2:15 p.m. that same day.109 As Pawley later described the meeting:

Holland, still armed with his law books, took the ºoor ªrst but didn’t get very
far before Eisenhower interrupted him.

“Henry,” he said, “put away the law books. Let’s discuss this from a practical
viewpoint.” He turned to Dulles, who as head of CIA probably knew more
about the actual workings of the operation than anybody else, and asked him
what chance Castillo Armas would have if we didn’t replace the planes.

“Nil,” Dulles answered.
“And if we supply them?”
“Perhaps twenty percent.”
Ike turned to me [Pawley].
“Bill, go ahead and get the planes.”110

Eisenhower’s version of this encounter, as published in his 1963 memoir,
concurs with Pawley’s account in nearly every particular. According to Eisen-
hower, Holland’s position was that Washington could not resupply Castillo
Armas even via the Nicaraguan conduit because of treaty obligations and the
grave risk of revealing the U.S. hand. Although Dulles did not claim that re-

Holland

107. Pawley, Russia Is Winning, p. 338. According to Thomas, the President’s injunction was, “When
you commit the ºag, you commit it to win.” See Thomas, Very Best Men, p. 119.

108. Bissell, Reºections, p. 87. Smith had served as General Eisenhower’s chief of staff during World
War II.

109. “Editorial Note,” in FRUS, 1952–1954, Vol. IV, p. 1177. The meeting is listed in President Ei-
senhower’s appointment records as being “Off the Record”—that is, not to be disclosed to the press.

110. Pawley, Russia Is Winning, p. 340. One of the CIA documents released in 2003, a memorandum
from Richard Bissell referring to the second group of F-47s, observed that “all negotiations concerning
the second group of aircraft had to be conducted secretly and ostensibly on behalf of a private group
which could invoke neither legal nor diplomatic sanctions.” This document reveals why the paper trail
is meager and comes closer than any in corroborating Pawley’s account of the transaction. “Purchase of
Airplanes in Connection with Project PBSUCCESS,” 5 October 1954, in CIA Guatemala ERR.

supply would absolutely guarantee victory, he argued that the coup should
not be permitted to fail, essentially “for want of a nail.” Eisenhower wrote that
he approved the transfer because “to refuse to cooperate in providing indirect
support to a strictly anti-Communist faction . . . would [have been] contrary
to the letter and spirit of the Caracas Resolution.” The president observed
that “even a small amount of air support” could have an “important psycho-
logical impact.”111 The only signiªcant difference between Eisenhower’s and
Pawley’s memoirs is that the former neglects to mention that Pawley was pres-
ent when the pivotal meeting took place.112

Allen Dulles received Eisenhower’s decision with his customary good
cheer. Dulles told the president on their way out of the Oval ofªce that “when
I saw Henry [Holland] walking into your ofªce with three large law books
under his arm, I knew he had lost his case already.”113 Not until a decade later,
after Eisenhower’s 1963 memoir was published, did Pawley and Allen Dulles
learn how close they had come to losing the argument. Eisenhower recalled
that he found Dulles’s estimate of a 20 percent chance of success persuasive
because it seemed honest. “It showed me that [Dulles] had thought this mat-
ter through, realistically.” The memoir made clear that if Dulles had tried to
impress Eisenhower by making a rosy prediction—say, a 90 percent chance of
success—the president would have had a much more difªcult decision.114

“It was an insight into [Eisenhower’s] decision-making mystique,” noted
Pawley.115

After the meeting with Eisenhower, Pawley returned to his ofªce and told
his secretary to ask Guillermo Sevilla-Sacasa, Nicaragua’s ambassador to the
United States since 1942, to come over immediately. When Sevilla-Sacasa ar-
rived twenty minutes later, Pawley told him he needed a check for $150,000
to transfer three surplus F-47 Thunderbolts from the Defense Department to
Nicaragua for lease to Castillo Armas.116 Sevilla-Sacasa said it would take sev-

Private Sources of U.S. Foreign Policy

111. Eisenhower, Mandate for Change, pp. 425–426.

112. Besides leaving Pawley out, Eisenhower wrote that Secretary of State Dulles was present. Actually
Dulles spent a long weekend at his Duck Island, Ontario, vacation home and did not return to Wash-
ington until late on 22 June. “President Calls 2-Party Talk on Far East,” The Washington Post, 23 June
1954, p. 7. Pawley’s accuracy on this point helps to corroborate his account.

113. Eisenhower, Mandate for Change, pp. 425–426.

114. Ibid.

115. Pawley, Russia Is Winning, p. 340. Schlesinger and Kinzer add another coda to the Oval Ofªce
meeting in Bitter Fruit. They recount how Eisenhower later complained about Holland’s presentation.
“If you at any time take the route of violence or support of violence . . . then you commit yourself to
carry it through,” said Eisenhower to his military aide, General Andrew Goodpaster. See Schlesinger
and Kinzer, Bitter Fruit, p. 178.

116. In his memoir Eisenhower identiªes the replacement aircraft as two P-51 Mustang ªghter-
bombers, whereas Pawley’s memoir, written long before PBSUCCESS records were declassiªed, stipu-

eral days to acquire that amount of money, but Pawley promptly called Riggs
Bank in Washington, withdrew $150,000 in cash from his personal account,
stuffed it into an empty briefcase, and drove with the Nicaraguan envoy to the
Pentagon. Ofªcials there were startled by the unorthodox transaction, but
they signed the contract transferring title of the aircraft to the Nicaraguan
government that same afternoon.117 “The planes landed at Panama [from
Puerto Rico] that evening, were turned over to the Castillo Armas pilots,
armed, and then ºown into combat against the Communist positions at
dawn,” Pawley recounted in his memoir. “Those three aircraft in the sure
hands of eager pilots spelled the difference. Arbenz capitulated.”118

Several historians, including Piero Gleijeses most notably and forcefully,
have taken issue with Pawley’s assertion about the signiªcance of the addi-
tional aircraft. Gleijeses, in his widely praised 1991 history, claims that the re-
bels’ air force had little impact on the situation in the ªeld and that in no
sense was 22 June a historic moment when the fate of the operation hung in
the balance.119 Much of the evidence in the historical record supports this
contention. Eisenhower in his memoir acknowledges that the air support pro-
vided to Castillo Armas was meager in military terms. Moreover, Eisenhower,
in contrast to Pawley, does not draw a direct line of causality. The president
notes only that “delivery of the planes was prompt and Castillo successfully
resumed his progress.”120

But even if the 22 June resupply decision was of limited importance from
a purely military standpoint, this does not mean it was inconsequential. On
the contrary, if PBSUCCESS is viewed as primarily psychological rather than
actual warfare, then restocking Armas’s tiny air force was absolutely vital.121

Holland

lates that the planes were F-47s. The ofªcial records corroborate Pawley’s recollection. See Cullather,
Secret History, pp. 70–71, and “Memorandum for the Record, Subject: F-47 Aircraft,” 20 January
1955, in CIA Guatemala ERR.

117. According to Evan Thomas, Richard Bissell was part of the unorthodox transaction, though
Bissell does not mention the episode in his memoir. See Thomas, Very Best Men, p. 120. That Pawley’s
check writing did in fact occur is hinted at by Wise and Ross, who refer to “some interesting ªnancial
legerdemain” by Ambassador Sevilla-Sacasa. Wise and Ross, Invisible Government, p. 179. The legality
of the arms transfer under the provisions of the Mutual Security Act then in force has not been estab-
lished.

118. Pawley, Russia Is Winning, pp. 341–343.

119. Gleijeses, Shattered Hope, p. 340–342.

120. Eisenhower, Mandate for Change, p. 426.

121. As described in an illuminating 20 June 1954 memorandum to President Eisenhower,
PBSUCCESS was intended mainly to create the impression of a substantial ªghting force. An active air
force was critical to propagation of this illusion. See “Memorandum for the President from K.W.
McMahan, acting assistant director of Current Intelligence,” 20 June 1954, in FRUS, 1952–1954,
Vol. IV, pp. 1174–1176. The vital role of airpower in psychological warfare against the Arbenz regime
is also described in the NACLA report on Guatemala, pp. 51, 69–70; Bissell, Reºections, pp. 85–86;
Thomas, Very Best Men, p. 113; and Andrew, For the President’s Eyes Only, p. 208.

The assistance to Castillo Armas, minuscule though it was, represented a
powerful asset, a force majeure.122 Ranking ofªcers in the Guatemalan army
recognized that Armas “could not have obtained these arms [aircraft] without
U.S. acquiescence,” as Ambassador Peurifoy reported back to Washington on
27 June.123 Ultimately, the realization that Washington might intervene di-
rectly if Castillo Armas failed was a strong and even decisive factor for the
Guatemalan ofªcer corps.124 The aircraft helped give the Guatemalan army,
which was always going to be the crucial element in the success or failure of
PBSUCCESS, the excuse to capitulate to an invading force that was decidedly
inferior in the ªeld.125

President Eisenhower reasoned much the same way in his memoir, argu-
ing that the importance of the resupplied aircraft was far out of proportion to
their military utility. He recalled that although Castillo Armas’s “air superior-
ity” was of the smallest possible margin, the mere fact that the Arbenz forces
were on the receiving end of air power gave the Guatemalan army “an excuse
to take action in their own hands.”126 This, indeed, was the entire premise on
which PBSUCCESS had been based. It is just as erroneous to dismiss the sig-
niªcance of the additional F-47s as it is to assign them full responsibility for
the victory of PBSUCCESS. Pawley of course subscribed to this latter view,
arguing that the three additional F-47s had turned the tide of battle.127

Pawley believed that the coup in Guatemala was an unmitigated tri-
umph, with far more import for U.S. foreign policy than the 1953 operation
in Iran. True to the Republican platform promises of 1952, Eisenhower had
rebuffed a Communist encroachment, and even if it was not a pure case
of rollback, it was close enough. The United States, in this depiction, had
successfully blunted a Communist takeover in Guatemala. Or, as an over-

Private Sources of U.S. Foreign Policy

122. “Telegram from the CIA Station in Guatemala to Operation PBSUCCESS Headquarters in
Florida,” 24 June 1954, in FRUS, 1952–1954, Guatemala, p. 376.

123. “The Ambassador in Guatemala (Peurifoy) to the Department of State,” 27 June 1954, in
FRUS, 1952–1954, Vol. IV, pp. 1189–1190.

124. To be sure, other cascading factors contributed to the army’s decision to force Arbenz’s resigna-
tion. Perhaps the most important was the Guatemalan president’s decision on 25 June to arm people’s
organizations and political parties once it became apparent that the army was not putting up much re-
sistance. Much like Arbenz’s decision to seek arms from the Soviet bloc, the action only hardened the
will of his adversaries in the armed forces. Arbenz formally resigned on the evening of 27 June.

125. Gleijeses, Shattered Hope, pp. 341–342. See also “Telegram from the Central Intelligence Agency
to the CIA Station in Guatemala,” 22 June 1954, in FRUS, 1952–1954, Guatemala, pp. 367–368.

126. Eisenhower, Mandate for Change, p. 426.

127. Ibid.; Gleijeses, Shattered Hope, p. 375; and Cullather, Secret History, pp. 75–76. Eisenhower’s
22 June decision has been contrasted sharply with John Kennedy’s choices during the Bay of Pigs inva-
sion. For example, Dulles “remembered Eisenhower approving more planes just in time to salvage the
faltering Guatemala coup. The CIA expected the same [decisive commitment] from President Ken-
nedy.” See Thomas, Very Best Men, p. 247.

ebullient California congressman put it, for the ªrst time in the Cold War
“democratic [sic] forces . . . were able to overthrow a Communist government
once it had been established in power.”128 The CIA exuded a sense of triumph
and omnipotence, but no one involved in the operation was more pleased,
more certain that the United States had done the right thing, and more de-
voted to replicating PBSUCCESS as need be in the future than Pawley was.129

After the fall of “Red Jacobo,” Eisenhower asked Pawley, probably during a
private meeting on 10 July 1954, to lead a review of the CIA’s conduct of co-
vert activities.130 A well-regarded history of the agency suggests that Eisen-
hower appointed this panel because he wanted to prevent Congress from con-
ducting its own probe of the clandestine service, though contemporary news
articles hinted at other reasons.131 But according to Pawley, the idea for this se-
cret report stemmed from the gaps in planning and coordination that became
evident during PBSUCCESS, along with a troubling event that occurred just
before Castillo Armas’s invasion.

As Pawley recounted the episode, sometime after he became involved in
PBSUCCESS he was playing a game of tennis with Phil Graham, publisher of
The Washington Post. As they rested, Graham, who knew of Pawley’s keen in-
terest in Latin America, mentioned that Washington was planning to assist a
Guatemalan colonel in overthrowing the Arbenz regime. Pawley expressed in-
terest in hearing more, so Graham obliged. “I might as well have been listen-

64
Holland

128. House Select Committee on Communist Aggression, Subcommittee on Latin America, Commu-
nist Aggression in Latin America: Hearings, 83rd Cong., 2nd sess., 1954, pp. 2, 66–67, 70. The con-
gressman was Patrick Hillings (R-CA). On the role of Congress during the crisis, see David Barrett,
“Sterilizing a ‘Red Infection’: Congress, the CIA and Guatemala, 1954,” Studies in Intelligence, No. 10
(Winter–Spring 2001), pp. 23–31; and Holland, “Operation PBHISTORY,” pp. 212–218.

129. Pawley makes no mention in his memoir of attending an extraordinary session at the White
House on 29 July 1954, when almost everyone from the CIA involved in PBSUCCESS received the
president’s thanks. “Notiªcation to Personnel on Meeting at 1600 Pennsylvania Avenue,” 29 July
1954, in CIA Guatemala ERR; and Phillips, Night Watch, p. 49–51. For a critique of the coup’s conse-
quences for Guatemala, see Streeter, Managing the Counterrevolution.

130. The president’s published schedule listed a meeting with Pawley at 10:30 a.m. on 10 July. “The
President’s Appointment List,” The Washington Post, 10 July 1954, p. 11.

131. Anne Karalekas, “History of the Central Intelligence Agency,” in U.S. Congress, Senate, Select
Committee to Study Governmental Operations with Respect to Intelligence Activities, Supplementary
Detailed Staff Reports on Foreign and Military Intelligence: Final Report, Book IV, 94th Cong., 2nd sess.,
Committee Print, pp. 52–53; and Hanson Baldwin, “Doolittle Heads Inquiry into CIA,” The New
York Times, 14 October 1954, pp. 1, 3. The formal title of the Doolittle Committee was “Panel of
Consultants on Covert Activities of the Central Intelligence Agency.” The press speculated about the
reasons for setting up the panel—rumors about covert operations gone awry, damaging leaks, and de-
fections—but none of the articles tied it to Operation PBSUCCESS.

ing to a TOP SECRET brieªng at State,” Pawley later wrote.132 Graham knew
almost everything; the only thing missing from his account was Pawley’s own
role in the preparations. Feigning nonchalance, Pawley questioned Graham
until he ªnally revealed the name of his source. He was a high ofªcial in the
CIA’s plans directorate, a man who had spoken too freely after a few sets of
tennis.

Pawley surmised that President Eisenhower would be interested in the
leak. According to Pawley, the breach of security (which, in truth, was only
one among many) was a key factor in spurring Eisenhower to action. “Bill,”
the president reportedly said, “I want you to conduct a thorough investigation
of the covert side of CIA operations for me.” But Pawley declined the panel’s
chairmanship, telling the President: “If I head such a committee, I might im-
pair a valuable relationship with John [Foster] and Allen Dulles.”133 Instead,
Pawley agreed to serve as one of four members of what would become known
as the Doolittle committee, after its chairman, the retired U.S. Air Force Lieu-
tenant General James Doolittle.134 Eisenhower met with Pawley and Doolittle
on 13 July, and the panel was formally constituted on 26 July. Having been
asked by the president to make recommendations “calculated to improve the
conduct of these [covert] operations,” the panel conducted the most exhaus-
tive inquiry theretofore undertaken into the CIA’s Plans Directorate.135 Over
an intense, ten-week period, the panel interviewed dozens of ofªcials in the
agency and other government departments and visited CIA stations abroad,
probing into the most secret aspects of the agency’s clandestine activities.136

The investigation corroborated what Pawley suspected after his involvement
in PBSUCCESS: Even though Allen Dulles was an experienced and skilled
intelligence practitioner, his administrative and organizational abilities left
much to be desired. Dulles’s weaknesses magniªed a vulnerability of the CIA:

Private Sources of U.S. Foreign Policy

132. Pawley, Russia Is Winning, p. 343–344. The acid description of the CIA’s Tracy Barnes in Helms,
A Look over My Shoulder, pp. 176–177, suggests that Barnes may have been the tennis-playing culprit.
See also Thomas, Very Best Men, p. 114.

133. Pawley, Russia Is Winning, pp. 343–344.

134. Pawley’s relationship with Doolittle went back decades. The retired lieutenant general had once
been a test pilot for Pawley. See “William Pawley, Ex-Envoy to Brazil, Aviation Expert,” p. A31.
Doolittle was also a friend of DD/P director Frank Wisner. The two other members of the committee
were William Franke, a prominent New York accountant who was about to be nominated to a civilian
position in the Navy Department, and Morris Hadley, the founding partner of a prominent Wall
Street law ªrm who was an old friend of Allen Dulles. Franke would go on to become secretary of the
Navy from 1959 to 1961. Hadley’s cooperation with CIA funding of non-governmental organizations
was exposed during the 1967 Ramparts ºap, when it was revealed that the Rubicon Foundation (of
which Hadley was the treasurer) served as a secret conduit for CIA funds. Richard Harwood, “CIA
Reported Ending Aid to Some Groups,” The Washington Post, 22 February 1967, p. A1.

135. “Report on the Covert Activities of the Central Intelligence Agency” (“Doolittle Report”),
30 September 1954, in National Archives II (NARA), CIA Records Electronic Search Tool (CREST).

136. Ranelagh, The Agency, p. 276; and “Doolittle Heads Inquiry into CIA,” p. 1.

that it had grown “like topsy, [and was a] sloppy organization.” There was a
“complete lack of security consciousness,” and too much information was
leaked at cocktail parties. Dulles’s stafªng of the agency was also open to ques-
tion.137

Dulles’s lax management and poor choice of personnel would not be-
come public issues until the spring of 1961, after the Bay of Pigs debacle. The
agency meanwhile basked in the perceived successes of Operations TPAJAX
and PBSUCCESS, and the Doolittle report did nothing to diminish the
conªdence of the agency’s covert operators. The recommendations and ªnal
language of the top secret, 69-page Doolittle report functioned as “principally
an afªrmation of the need for a clandestine capability.”138 No substantive
changes in CIA management occurred.139 The report, which mirrored
Pawley’s views precisely, endorsed a carte blanche policy with respect to covert
activities in rhetoric matched by few government documents generated dur-
ing the Cold War:

It is now clear that we are facing an implacable enemy whose avowed objective is
world domination by whatever means and at whatever cost. There are no rules
in such a game. Hitherto acceptable norms of human conduct do not apply. If
the United States is to survive, long-standing American concepts of “fair play”
must be reconsidered. We must develop effective espionage and counterespio-
nage services and must learn to subvert, sabotage and destroy our enemies by
more clever, more sophisticated, and more effective methods than those used
against us. It may become necessary that the American people be made ac-
quainted with, understand and support this fundamentally repugnant phi-
losophy.140

66
Holland

137. “‘A Creditable Job’ Is Verdict on CIA,” The New York Times, 20 October 1954, p. 16. Although
the report contains general references to administrative and organizational problems, more speciªc
criticisms of Dulles’s management were delivered by Doolittle orally to the president when they met
privately on 19 October to discuss the ªndings. See “President’s Meeting with Doolittle Committee,”
19 October 1954, in DDE Library, Ann Whitman Diary, Box 3, October 1954.

138. Karalekas, “History of the Central Intelligence Agency,” pp. 52–53.

139. Ibid. As Karalekas observed, the Doolittle committee’s recommendations were hardly surprising
given the orientation and composition of the study group. All four members of the board were well
known to the CIA and had afªliations with top ofªcers in the clandestine service.

140. “Doolittle Report.” This document, together with the second Hoover Commission’s report, be-
came the foundation for NSC directives 5412/1 and 5412/2, which instituted procedures governing
the CIA’s clandestine activities. These directives remained in effect until 1970. Richard Best, “Pro-
posals for Intelligence Reorganization, 1949–2004,” 29 July 2004, Congressional Research Service,
U.S. Library of Congress, p. 12. See also (with caution) Prados, President’s Secret Wars, pp. 109–113.
Interestingly, by the time the American public became acquainted with the CIA’s covert arm after the
Bay of Pigs episode and during the 1967 Ramparts exposé (and also during the Church committee
hearings in the mid–1970s), the reaction was markedly different from the one envisioned by the
“Doolittle Report.”

After the Doolittle study was completed, Pawley remained a trusted
counselor and emissary during the Eisenhower years whenever events in Latin
America moved to the forefront of the Cold War. Although a thorough expo-
sition of Pawley’s post-1954 activities is beyond the scope of this article, it is
worth noting that he continued to enjoy the trust and conªdence of the presi-
dent, the vice president, and other inºuential administration ofªcials with re-
spect to developments in the hemisphere. In the late 1950s, Pawley was Eisen-
hower’s personal envoy in eleventh-hour efforts to obtain the resignations of
dictators in Cuba (Fulgencio Batista) and the Dominican Republic (Rafael
Trujillo), lest their continued rule lead to Communist takeovers. Both these
extraordinary missions were amply documented in the pertinent FRUS vol-
umes.141 In 1961, after the Bay of Pigs failure, Eisenhower wrote to General
Maxwell Taylor that he had “used [Pawley] frequently, as a private citizen, for
chores of different kinds during the years of my two administrations.”142

Despite Pawley’s newfound allegiance to the Republican Party, he re-
mained an inºuential supporter of conservative Democrats with anti-Com-
munist credentials, notably George Smathers. For Smathers, Pawley, and
Richard Nixon, partisan advantage did not get in the way of combating Com-
munism in the hemisphere, although the three men were not averse to gaining
a political edge. In May 1960, for example, Smathers contacted Nixon to tell
him that Pawley was “the answer” to a State Department that was “soft on
Communism.” Smathers promised that if Pawley were nominated to a senior
post in the Department “which would allow him to take a ªrm hand in our
policy toward Latin America,” the senator would guide the nomination
through the Senate Foreign Relations Committee.143 Smathers was referring
to on-and-off discussions about appointing Pawley to a new post of undersec-
retary of state for the Western Hemisphere.

In 1960, Pawley supported Richard Nixon over Kennedy, raised funds
for the Nixon campaign, and attended the Republican convention as a Florida
delegate. Paralleling the role played by Senator Smathers as an adviser on
Latin America in the Kennedy campaign, Pawley counseled Nixon on the
growing problems “just south of Miami,” meaning Cuba and the Dominican

Private Sources of U.S. Foreign Policy

141. FRUS, 1958–1960, Vol. V; and FRUS, 1958–1960, Vol. VI. See also Paterson, Contesting Castro,
ch. 18. In addition, Pawley testiªed about his Cuba mission before the Senate Internal Security Sub-
committee in 1961 and discussed these efforts in some detail in his memoir.

142. Dwight Eisenhower to Maxwell Taylor, 26 June 1961, in DDE Library, Post-Presidential,
Augusta-Walter Reed Series [April–June 1961].

143. “Memo re Phone Conversation with Senator Smathers,” 27 May 1960, in NAPR, Nixon Pre-
Presidential Material, Series 320, Box 582, Pawley Folder. Smathers also worked closely with Pawley
on his mission to Trujillo. At the same time, Smathers is largely credited with fashioning John Ken-
nedy’s hard line on Cuba during the 1960 presidential campaign.

Republic. Nixon held a high opinion of Pawley’s skills, especially his expertise
“with respect to this area [Latin America] of such vital importance to our wel-
fare and security.”144 The two men also shared a dim view of the State Depart-
ment’s foreign service ofªcers, believing that these ofªcers were overwhelm-
ingly biased in favor of liberal Democrats at home and were soft on
Communism and Communists overseas.

Most signiªcantly, in 1960–1961 Pawley attempted a reprise of his
PBSUCCESS role during Operation JMATE, the code name for what would
become known to the world as the Bay of Pigs invasion. Pawley was deeply in-
volved in the effort to depose Castro via a force trained and armed by the
CIA.145 Pawley communicated with agency ofªcers on a daily basis and occa-
sionally attended meetings at the White House with the president and secre-
tary of defense to review the covert plans.146 When the presidency changed
hands in January 1961 to the candidate not favored by Pawley, he continued
to volunteer his services so long as he believed President Kennedy was doing
the right thing, which for Pawley meant a counterrevolution in Cuba. The
new administration responded positively to his overtures. During a telephone
conversation with George Smathers on 24 January, just four days after Ken-
nedy’s inauguration, Allen Dulles assured the senator that “he [Dulles] was
working closely with Ambassador Pawley” on the Cuban matter.147 This state-
ment was welcome at the time insofar as relying on the same personnel in-
volved in PBSUCCESS seemingly increased the odds of a similar outcome in
Cuba.

Pawley was distraught after the April 1961 debacle and attributed the de-
feat entirely to President Kennedy’s loss of nerve, which Pawley contrasted

Holland

144. Richard Nixon to Arthur Gardner, 17 March 1959, in NAPR, Nixon Pre-Presidential Material,
Series 320, Box 582, Pawley Folder.

145. At a time when the State Department was still temporizing, Pawley had vehemently lobbied the
White House, State Department, and CIA against ever allowing Castro to come to power. Letter from
William Pawley to Richard Nixon, 15 April 1963, in NAPR, Nixon Pre-Presidential Material, Series
320, Box 582, Pawley Folder.

146. Letter from William Pawley to Richard Nixon, 18 July 1960. Because Pawley favored the more
conservative elements of the anti-Castro forces that were being organized, he was frequently at odds
with the CIA during this period. He made his views known to Nixon, putting the vice president in an
awkward position because Pawley, who hoped to be appointed assistant secretary of state for Latin
American affairs if Nixon won, was a major contributor to the Republican Party in 1960. J.C. King
and Nixon’s national security aide, General Robert Cushman Jr., had to confer more than once about
how to “handle” Pawley. See Jack Pfeiffer to Fawn Brodie, 1 March 1978, in NARA, CREST. See also
“Part VI: Mr. Nixon’s Role,” in Ofªcial [CIA] History of the Bay of Pigs Operation, Volume 3: Evolu-
tion of CIA’s Anti-Castro Policies, 1951-January 1961, John F. Kennedy Assassination Records Col-
lection, RG 263, Miscellaneous CIA Series, Box 1, JFK-M0–01 (F6); and Howard Hunt, Give Us This
Day (New Rochelle, NY: Arlington House, 1973), pp. 28–29, 40, 43.

147. “Memo of Telephone Conversation between Allen Dulles and George Smathers,” 24 January
1961, in NARA, CREST.

with Eisenhower’s resolve in ostensibly similar circumstances. “The unthink-
able happened,” Pawley wrote in his unpublished memoir. “An American
president ran out on our nation’s responsibility, abandoning our trusting
wards to death on the beaches, and to capture, torture, and/or ªring
squads.”148 A subsequent meeting between Pawley and Kennedy on 9 May, ar-
ranged at Eisenhower’s urging, marked an abrupt end to Pawley’s authorized
contributions to U.S. foreign policy. When Kennedy asked Pawley what he
would do now, he advocated dropping ten thousand Marines in the environs
of Havana. The meeting, for all practical purposes, was over at that point, and
thus ended Pawley’s privileged access to the White House.

From that point on, Pawley carried out his war against Communism in
Latin America mostly privately, although he continued to make his services
available to the JMWAVE station chief. As the former chief of station Theo-
dore Shackley described the relationship in a periodic report to CIA head-
quarters, Pawley, “as a well informed businessman with excellent connections
in the Miami community, has been used as a special contact for the conduct
of certain background data, operational intelligence, and the conduct of oper-
ational support tasks.”149 Pawley’s most notable efforts, however, were largely
self-initiated. He carried out a “one-man P[olitical] W[arfare] campaign”
against the Kennedy administration and its policies relative to Cuba and the
Caribbean.150 In July 1962, at a personal cost of $175,000, he ransomed back
three Bay of Pigs captives. He felt particularly responsible for the fate of the
three, whom he had personally recruited for the operation. This release oc-
curred ªve months before Washington’s own repatriation and ransom effort
bore fruit.

In collaboration with another wealthy former ambassador, Clare Boothe
Luce, Pawley arranged what he hoped would be “another Flying Tiger,” ex-
cept that this time the force was to consist entirely of surrogates. Luce and
Pawley underwrote a Cuban exile group known as the Directorio Revolucion-
ario Estudiantil (Student Revolutionary Directorate, or DRE) so that its
members could carry out raids and gather intelligence. There is ample reason
to believe that Pawley’s subsidies to the DRE produced the information that
ultimately emboldened Senator Kenneth Keating to allege that Soviet missiles

Private Sources of U.S. Foreign Policy

148. Pawley, Russia Is Winning, pp. 426–427.

149. “JMWAVE’s Relationship with Pawley,” 25 July 1963, in NARA, RG 541, John F. Kennedy As-
sassination Records Collection, Assassination Records Review Board, Series 4, Box 7, Pawley File.
More speciªcally, Pawley helped assess and recruit agents, provided Shackley with background infor-
mation on leading Cuban political personalities, and occasionally assisted the station chief in estab-
lishing covers for dummy corporations and CIA proprietaries.

150. Ibid.

were in Cuba well before the Kennedy administration conªrmed their pres-
ence.151 Subsequently, when the October 1962 crisis ended with Castro still in
place, an outraged Pawley launched his most brazen effort to inºuence ofªcial
policy, albeit with the knowledge of the CIA station in Miami. In 1963 he un-
derwrote a covert operation aimed at “rescuing” two Soviet technicians in
Cuba who were allegedly prepared to defect and testify that Moscow was vio-
lating its pledge to remove all offensive missiles from the island.152 The mis-
sion was an abject failure and marked, as far as is known, the end of Pawley’s
freelance clandestine activities.

Conclusion

William Pawley understood why President Eisenhower kept the ex-ambassa-
dor’s role in “strangling a Red dictatorship” under wraps.153 A mention of
Pawley’s advisory role in the overt diplomatic and political aspects of the 1954
crisis might have inhibited Eisenhower’s ability to call on Pawley again, some-
thing the president had every intention of doing—and indeed did. The situa-
tion was all the more volatile because of widespread allegations (and the
equally widespread perception) that UFCO largely dictated Washington’s pol-
icy toward Guatemala. Complete discretion remained advisable almost a dec-
ade after the coup. When the ªrst volume of Eisenhower’s White House
memoir was published in 1963, the former president privately explained to

70
Holland

151. Holland, “Luce Connection.”

152. Ibid., pp. 164–165; Don Bohning, “Disastrous Mission: Miamian Pawley Tells of ‘63 Cuba Op-
eration, Loss of 10 Exiles,” The Miami Herald, 8 January 1976, p. 3; Miguel Acoca and Robert Brown,
“The Bayo-Pawley Affair: A Plot to Destroy JFK and Invade Cuba,” Soldier of Fortune, Vol. 1, No. 2
(Spring 1976), pp 12–22, 60–61; and”JMWAVE’s Relationship with Pawley,” 25 July 1963.

153. Although the U.S. role in the 1954 coup was one of the worst-kept diplomatic secrets in Wash-
ington, the ofªcial position was that Washington had merely quarantined the Arbenz regime and that
the Guatemalan people had risen up independently and spontaneously to throw him out. The ªrst
time the U.S. government role was discussed more candidly was during the 1960 election campaign,
when Senator Thruston Morton (R-Kentucky), the former assistant secretary of state for congressional
relations, mentioned it. But because Morton made his remarks in Kentucky, they did not gain wide-
spread attention. In September 1960 testimony before the Senate Internal Security Subcommittee,
Pawley alluded to his involvement with the “Guatemala problem” in the résumé he submitted. Later,
in July 1961, during the same set of hearings, Whiting Willauer, ambassador to Honduras during
PBSUCCESS, talked openly about CIA support of Castillo Armas’s coup. Subsequently, during a Feb-
ruary 1963 Republican fund-raising dinner in Baltimore, Senator Morton spoke freely about Presi-
dent Eisenhower’s approval of the plan to topple Arbenz. In mid-1963, Eisenhower’s newly published
memoir revealed more details, but nothing about the degree to which the coup had been engineered
by the CIA. See Senate Subcommittee, Communist Threat, pp. 712, 865–866; Wood, Good Neighbor
Policy, p. 187; Wise and Ross, Invisible Government, p. 167; Horowitz, Free World Colossus, p. 164;
Max Gordon, “U.S. Subversion in Guatemala, 1954,” Science & Society, Vol. 35, No. 2 (Summer
1971), pp. 129–155; and Immerman, CIA in Guatemala, pp. 177–180.

Pawley that “he had deliberately omitted [Pawley’s] name [from the 22 June
Oval Ofªce meeting] because he felt that the practice of mentioning people
who held no ofªcial position in affairs of this sort could have undesirable re-
percussions.”154 Disclosure would have added fuel to Communist propaganda
that U.S. policy toward Latin America was dictated primarily by capitalist
business interests.

Fleshing out the historical record is reason enough to delineate Pawley’s
role in the Guatemala coup. Whether Operation PBSUCCESS would have
unfolded as it did without Pawley’s involvement misses the point. At a mini-
mum, the rebels’ air force would not have been resupplied so expeditiously
without Pawley’s extraordinary private underwriting of the arms transfer. But
the story of his participation in PBSUCCESS and the closely related
“Doolittle Report” is not solely about retrieving lost history. Nor is it merely a
reminder of the continuing need to integrate the intelligence dimension of
key events with previous, standard accounts as highly classiªed records be-
come available. Rather, Pawley’s career demonstrates that the Cold War in-
volved a mobilization of resources on both sides no less vast than what oc-
curred during the world wars.155 The Cold War has long been considered an
all-consuming conºict, but the nature of the standoff has not been systemati-
cally scrutinized.156 Though often fought by proxy or in the shadows at a gla-

71
Private Sources of U.S. Foreign Policy

154. Pawley, Russia Is Winning, p. 341. The closest Eisenhower came to revealing Pawley’s participa-
tion was during a 10 June 1963 speech in Washington. The former president was publicizing the ªrst
volume of his memoir at an American Booksellers Association convention. He recalled that “different
people, including Mr. Dulles and a member of the State Department [Henry Holland] and so on,
came into my ofªce to give their differing views.” Wise and Ross, Invisible Government, p. 167; em-
phasis added.

155. In the Communist bloc, with its command economies, the Cold War mobilization obviously dif-
fered from that of the West. Even within the West, arrangements varied.

156. In part, this lacuna is undoubtedly a function of the relative availability of government docu-
ments versus the sometimes formidable obstacles to research on private businesses, law ªrms, universi-
ties, labor unions, grant-making foundations, and the media. Integrating this private information with
the depiction of events in ofªcial records is a daunting task. Nonetheless, the body of literature on pri-
vate actors is interesting and growing. See, for example (in chronological order), Ronald Radosh,
American Labor and United States Foreign Policy (New York: Random House, 1969); James Aronson,
The Press and the Cold War (Indianapolis, IN: Bobbs-Merrill, 1970); Edward Berman, The Inºuence of
the Carnegie, Ford, and Rockefeller Foundations on American Foreign Policy: The Ideology of Philanthropy
(Albany: State University of New York Press, 1983); Robert Schulzinger, The Wise Men of Foreign Af-
fairs: The History of the Council on Foreign Relations (New York: Columbia University Press, 1984);
Nancy Lisagor and Frank Lipsius, A Law unto Itself: The Untold Story of the Law Firm Sullivan &
Cromwell (New York: William Morrow, 1988); Peter Coleman, The Liberal Conspiracy: The Congress
for Cultural Freedom and the Struggle for the Mind of Postwar Europe (New York: The Free Press, 1989);
Ronald Filippelli, American Labor and Postwar Italy, 1943–1953: A Study of Cold War Politics (Stan-
ford, CA: Stanford University Press, 1989); Michael Wala, The Council on Foreign Relations and Amer-
ican Foreign Policy in the Early Cold War (Providence, RI: Berghahn Books, 1994); Ted Morgan, A Co-
vert Life: Jay Lovestone, Communist, Anti-Communist, and Spymaster (New York: Random House,
1999); Frances Stonor Saunders, The Cultural Cold War: The CIA and the World of Arts and Letters

cial pace, the Cold War, no less than the hot wars of the twentieth century,
shaped non-governmental actors in the United States and in turn was shaped
by them. Put another way, the Cold War suffused every level of American civil
society in addition to being the dominant motif inside the government for
half a century.

With respect to the United States, a country in which private activities
and actors are invariably given the widest berth, the nature of this mobiliza-
tion has been dubbed the “state-private network,” chieºy by scholars from the
United Kingdom who specialize in American studies.157 Regardless of whether
this term proves durable, Pawley’s role in the Guatemalan coup lends credence
to the notion that the Cold War as prosecuted by the United States cannot be
understood without reference to the supporting roles played by businesses,
foundations, labor unions, law ªrms, universities, the media, and inºuential
private citizens.158 Via informal or unofªcial channels, these actors occasion-
ally informed key decisions or were important cogs in their implementation.
Not everything of import originated with elected or career ofªcials in Wash-
ington. Events could be inºuenced by unusually energetic members of the
private sector such as Pawley.

The myriad ways in which policy was (and is) formed, inºuenced, and
implemented in the American state/private network was further illustrated by
the Iran-contra scandal some three decades later. That debacle nearly sparked
a constitutional crisis when journalists and congressional investigators re-
vealed that the Reagan administration had secretly raised money from foreign
governments, foreign foundations, and private American citizens to under-
write activities that the Congress had refused to ªnance. It is worth noting,
too, that because the United States now faces a geopolitical challenge in the
form of Islamist terrorism, some have suggested that the CIA or some other

72
Holland

(New York: The New Press, 1999); Volker Berghahn, America and the Intellectual Cold Wars in Europe:
Shepard Stone between Philanthropy, Academy, and Diplomacy (Princeton, NJ: Princeton University
Press, 2001); Ron Robin, The Making of the Cold War Enemy: Culture and Politics in the Military-Intel-
lectual Complex (Princeton, NJ: Princeton University Press, 2001); and Giles Scott-Smith and Hans
Krabbendam, eds., “The Cultural Cold War in Western Europe, 1945–1960,” Special Issue, Intelli-
gence and National Security, Vol. 18, No. 2 (Summer 2003). For a review essay that evaluates several re-
cent works on higher education during the Cold War, see David Engerman, “Rethinking Cold War
Universities: Some Recent Histories,” Journal of Cold War Studies, Vol. 5, No. 3 (Summer 2003),
pp. 80–95.

157. See the call for papers, “The American State-Private Network in the Cold War,” 27–28 June
2003, University of Birmingham. Much of the impetus for this reconsideration has come from schol-
ars studying the role of intellectuals and other cultural aspects of the Cold War. See, for example,
W. Scott Lucas, “Beyond Freedom, Beyond Control: Approaches to Culture and the State-Private
Network in the Cold War,” Intelligence and National Security, Vol. 18, No. 2 (Summer 2003), pp. 53–
72.

158. One-time presidential candidate and multi-millionaire businessman H. Ross Perot is a latter-day
example of a Pawley-like ªgure. Perot not only has carried out private policy initiatives in Southeast
Asia and the Middle East, but also shares some of Pawley’s unusual personal qualities.

U.S. government entity ought to support desirable educational activities via
private entities.159 This very practice is what resulted in one of the biggest
ºaps in the agency’s history in 1967 and is precisely the impulse that has given
one of the strongest boosts to the “state-private network” concept.160 Further
research on this aspect of U.S. foreign policy promises to be one of the richest
areas in the years ahead for the study of the Cold War.

Note

An earlier version of this article was presented at the conference, “The United
States, Guatemala, and Latin America: New Perspectives on the 1954 Coup,”
Washington, DC, 14–16 May 2003, organized by the Ofªce of the Historian,
U.S. Department of State.

73
Private Sources of U.S. Foreign Policy

159. Walter Pincus, “Idea of Inºuencing Schools Echoes ’50s,” The Washington Post, 1 November
2003, p. A3.

160. For a concise description of the 1967 controversy, see Michael Warner, “Sophisticated Spies:
CIA’s Links to Liberal Anti-Communists, 1949–1967,” International Journal of Intelligence and
Counterintelligence, Vol. 9, No. 4, (Winter 1996/1997), pp. 101–119.

CurrentPolitics and Economics of … ISSN: 1935-2549

GUATEMALA: POLITICAL

AND SOCIOECONOMIC CONDITIONS

AND U.S. RELATIONS

Maureen Taft-Morales

ABSTRACT

Guatemala, the most populous Central American country, with a

population of 16.3 million, has been consolidating its transition to

democracy since the 1980s. Guatemala has a long history of internal

conflict, including a 36-year civil war (1960-1996) during which the

Guatemalan military held power and over 200,000 people were killed or

disappeared. A democratic constitution was adopted in 1985, and a

democratically elected government was inaugurated in 1986.

President Jimmy Morales, a political newcomer, took office in

January 2016, having campaigned on an anti-corruption platform. The

previous president and vice president had resigned and been arrested after

being implicated in a large-scale corruption scandal. Morales is being

investigated for corruption and has survived two efforts to remove his

immunity from prosecution.

In what many observers see as a step forward in Guatemala’s

democratic development, the Public Ministry’s recent corruption and

human rights abuse investigations have led to the arrest and trial of high-

level government, judicial, and military officials. The Public Ministry is

responsible for public prosecution and law enforcement, and works in

conjunction with the United Nations-backed International Commission

 This is an edited, reformatted and augmented version of Congressional Research Service

Publication No. R42580, Updated March 27, 2018.

Maureen Taft-Morales 174

against Impunity in Guatemala (CICIG) to strengthen rule of law in

Guatemala. As their anti-corruption efforts prove effective, the circle of

those feeling threatened by investigations broadens, and attacks against

CICIG and the judicial system it supports broaden and intensify as

well.

Since Morales and some of his inner circle became the targets of

investigations, he has tried to weaken CICIG and fired some of his more

reformist officials. Observers within Guatemala and abroad worry that

Morales is trying to protect himself and others from corruption charges.

Guatemala continues to face many other challenges, including

insecurity, high rates of violence, and increasing rates of poverty and

malnourishment. Guatemala remains a major transit country for cocaine

and heroin trafficked from South America to the United States. Although

Guatemala recorded record drug seizures in 2016, the lack of law

enforcement and the collusion between corrupt officials and organized

crime in many areas enable trafficking of illicit drugs, precursor

chemicals, weapons, people, and other contraband. During Morales’s first

year, his administration improved tax collection, and the interior ministry

reported a 5% drop in homicide rates.

Guatemala has the largest economy in Central America and in recent

decades has had relatively stable economic growth. Despite that

economic growth, Guatemala’s economic inequality and poverty have

increased, especially among the rural indigenous population. The

Economist Intelligence Unit projects that the country’s economic growth

rate will likely peak in 2018-2019 at 3.2%, followed by a decrease until

2022. The World Bank calls for rapid economic growth coupled with

increased public investment and pro-poor policies to improve social

conditions.

Traditionally, the United States and Guatemala have had close

relations, with friction at times over human rights and civil/military

issues. Guatemala and the United States have significant trade and are

part of the U.S.-Central America-Dominican Republic Free

Trade

Agreement (CAFTA-DR). Top priorities for U.S. bilateral assistance to

Guatemala include improving security, governance, and justice for

citizens; improving economic growth and food security; providing

access to health services; promoting better educational outcomes;

providing opportunities for out-of-school youth to reduce their desire to

migrate. The U.S. Strategy for Engagement in Central America is meant

to spur development and reduce illegal emigration to the

United States.

The Trump Administration’s proposed FY2018 budget request would

have cut funds for Guatemala by 36% and eliminated traditional food aid

and the Inter-American Foundation. Congress rejected much of those

cuts in the reports to and language in the Consolidated Appropriations

Act, 2018 (P.L. 115-141).

Guatemala 175

POLITICAL CONDITIONS

President Jimmy Morales, a relative political newcomer, won Guatemala’s

2015 presidential election by a landslide with 67% of the vote. During the

campaign, as mass protests calling for then-President Pérez Molina’s

resignation and an end to corruption and impunity grew, so did Morales’s

popular appeal.

Guatemala at a Glance

People:

Population: 16.58 million (2016, World Bank) Life expectancy: men, 71 years;

women, 75 years

Ethnic groups: Mixed and European (60.1%); Indigenous Maya (39.3%); other (0.6%)

Literacy: men, 87.4%; women, 76.3% Poverty: 59.3% (2014)

Economy

GDP: $68.763 billion (2016) GNI per capita: $3,790 (2016)

GDP composition by sector: agriculture, 13.2%; industry, 23.5%; services, 63.3%

(2016 estimates)

Trade

Key export partners: United States (33%), El Salvador (11.53%), Honduras (8.75%)

Top exports to the United States (2016): edible fruit and nuts, citrus fruit, or melon

peel; apparel articles and accessories; sugars and sugar confectionary

Leadership

President Jimmy Morales (the president is both chief of state and head of government)

Morales framed his lack of political experience as an asset. His campaign

slogan was “Neither corrupt nor a thief,” and he ran on a platform of

governing transparently and continuing to root out corruption. He is now being

investigated for corruption himself.

Guatemala faces many political and social challenges in addition to

widespread corruption and impunity. Guatemala has some of the highest levels

of violence, inequality, and poverty in the region, as well as the largest

population. Indigenous people, about half of the population, experience higher

rates of economic and social marginalization than nonindigenous citizens, and

have for decades. Almost half of the country’s children are chronically

malnourished.

Maureen Taft-Morales 176

Source: Graphic created by CRS using data from the Department of State (2015) and

Global Administrative Areas (2017).

Figure 1. Guatemala at a Glance.

Guatemala’s homicide rate decreased to 26.1 per 100,000 in 2017, which

nonetheless remains one of the highest rates in the region.1 Guatemala has a

long history of internal conflict and violence, including a 36-year civil war

(1960-1996). For most of that time, the Guatemalan military held power and

violently repressed and violated the human rights of its citizens, especially its

majority indigenous population. Reports estimate that more than 200,000

people were killed or disappeared during the conflict, with the state bearing

responsibility for 93% of human rights violations. More than 83% of the

victims were identified as Mayan.2 In 1986, Guatemala established a civilian

democratic government, but military repression and human rights violations

1 “Homicidios bajan a 12.16 por ciento,” Diario de Centro América, February 7, 2018.
2 Christian Tomuschat, Otilia Lux de Coti, and Alfredo Balsells Tojo, Guatemala: Memory of

Silence, Commission for Historical Clarification,1999, pp. 17, 20.

Guatemala 177

continued. Peace accords signed in 1996 ended the conflict. The United States

maintained close relations with most Guatemalan governments, including the

military governments, before, during, and after the civil war.

Since the late 1980s, Guatemala has sought to consolidate its transition

from military and autocratic rule to a democracy. Democratically elected

civilian governments have governed for over 30 years, but democratic

institutions remain fragile due to high levels of corruption, impunity, drug

trafficking, and inequitable distribution of resources. Although state

institutions have investigated and arrested high-level officials, including a

sitting president, for corruption, high levels of impunity in many cases

continue due to intimidation of judicial officials, deliberate delays in judicial

proceedings, and widespread corruption.

The Supreme Electoral Tribunal (TSE) investigated multiple political

parties for violations of election campaign finance laws in 2014 and 2015, as

part of its auditing process. As a result, the TSE dissolved two major parties,

the Partido Patriota—former President Pérez Molina’s party— and LIDER.

President Morales presented his General Government Policy for 2016-

2020 in February 2016. The five pillars of this plan are zero tolerance for

corruption, and modernization of the state; improvement in food security and

nutrition; improvement in overall health and quality education; promotion of

micro, small, and medium enterprises, and tourism and housing construction;

and protection of the environment and natural resources.

Halfway into his four-year term, however, Morales is being investigated

for corruption and criticized for seemingly backing off his pledge of zero

tolerance for corruption. In 2017, two members of the president’s family were

arrested on corruption charges. In August and September 2017, Guatemala’s

attorney general and a United Nations (U.N.) anti-impunity commission

announced they were seeking to lift the president’s immunity from prosecution

as they investigate alleged violations of campaign finance laws and bonuses

paid to him by the military. The president tried unsuccessfully to expel the

head of the U.N.-backed International Commission against Impunity in

Guatemala (CICIG), Commissioner Ivan Velásquez, and has since argued that

the commission is no longer needed. (See “Efforts to Combat Impunity and

Corruption,” below.)

A recent opinion poll found that more than 72% of the population has

little or no trust in the police, and about 65% has little to no trust in the

Maureen Taft-Morales 178

government3 Conversely, 83% of the population said they supported CICIG

and the Public Ministry—which is headed by the attorney general— making

them Guatemala’s most trusted institutions.

So far, the judicial process, protests, and mass mobilizations in the wake

of high-level government corruption scandals have remained peaceful.

Nonetheless, tensions have heightened since President Morales tried to expel

CICIG’s commissioner, and the Guatemalan Congress tried to reduce criminal

penalties for campaign-related corruption. Renewed public protests called for

the resignations of President Morales and members of Congress seen as

protecting corrupt practices. (See “Current Political Tensions,” below.)

While some see the corruption charges as a crisis, others—including many

within the Guatemalan government—see an opportunity to make the

government more honest and accountable. Nonetheless, continued impunity

coupled with the state’s failure to provide basic public services to large parts of

the population and limited advances in reducing Guatemala’s high poverty

levels could prolong protests. Military-criminal enterprises and other powerful

interests that have benefited from corruption and the status quo have fought

against anti-corruption and anti-impunity work since it began. They have

threatened public prosecutors, the attorney general, and members of the

judiciary. Continued prosecution of corruption could provoke increasingly

violent responses from those whose wealth or power are threatened. Powerful

interests also use more subtle methods to try to weaken CICIG, the Public

Ministry, and groups pushing for political reform. These include tactics such as

discrediting the reputations of officials, activists, and their organizations; delays

or cuts in the judicial system’s budget; spurious legal actions that delay trials

and drain fiscal and human resources; and attempts to change CICIG’s mandate

or terms.

President Jimmy Morales’s Administration

President Morales’s administration achieved a few significant reforms in

the first year and a half. For example, the administration developed tax reform

3 Martín Rodríguez Pellecer, “Encuesta: Pro MP-CICIG y Democracia, y no por Gobierno, Cacif

y Ejército,” Nómada, March 27, 2017.

Guatemala 179

policies covering tax collection, the tax authority administration, and the

customs office structure. Since Morales and some of his inner circle became

the targets of investigations, however, he has tried to weaken CICIG and fired

some of his more reformist Cabinet ministers and other officials who worked

closely with CICIG and the attorney general’s office, replacing them with

closer allies. This has raised concerns both domestically and internationally

that Morales is trying to protect himself and others from corruption charges

and may be reversing reformist policies.

The tax administration (SAT), under the leadership of Juan Francisco

Solórzano for the first two years of the Morales administration, used judicial

measures and intervention to increase recovery of unpaid taxes and

substantially increased tax collection. Solórzano, a former head of the criminal

investigation unit at the attorney general’s office, had the endorsement of

CICIG as well as the Inter-American Development Bank, World Bank, and

International Monetary Fund.4 Under his leadership, the SAT collected $297

million in recovered taxes in 2016 compared to $5 million in 2015.5 Following

austerity measures in 2016 that limited government spending and decreased the

deficit, the Guatemalan Congress passed an expansionary budget for 2017.6

This was possible in part because of increased state revenues from improved

tax collection. Solórzano also played a key role in prominent anti-corruption

cases. President Morales fired Solórzano in January 2018.

President Jimmy Morales

Born in 1969 in Guatemala City, Guatemala, to a family of humble means, Morales

entered politics after making a name for himself as a TV comedian. When he lost the

mayoral race for Mixco in 2011, Morales joined his current party, the right-wing National

Convergence Front-Nation (FCN-Nación), in 2013 and became secretary general of the

party. In 2015, FCN-Nación nominated him as its presidential candidate; he drew on his

outsider status to distance himself from the historically corrupt political class.

Investigations by CICIG and the Public Ministry (MP) have implicated Morales’s

brother and son in a fraud case. The attorney general is seeking to have Morales’s

immunity from prosecution lifted so he can be investigated for possible campaign

finance violations and payments the military paid to him while president.

4 “Morales Fills a Key Post in Guatemala,” LatinNews, March 10, 2016.
5 Urias Gamarro, “Intervenciones de SAT Mejoraron Cobranza,” Prensa Libre, May 2, 2017.
6 Economist Intelligence Unit, “Country Report: Guatemala,” generated June 7, 2017, p. 2.

Maureen Taft-Morales 180

The interior ministry, which includes Guatemala’s National Civil Police

(PNC) force, oversaw a drop in the homicide rate from 27.3 homicides per

100,000 people in 2016 to 26.1 per 100,000 in 2017, the lowest rate in nine

years.7 In February 2018, the Morales administration dismissed the three

senior officials of the national police, saying it sought “to generate more

positive results to benefit citizen security and the fight against organized

crime.”8 A wide range of people, including human rights activists and business

leaders, expressed concern at their dismissal. The country’s Human Rights

Ombudsman, Jordán Rodas, said Guatemalans must be “very alert” to any

movement that represents “regression.”9 A prominent trade association known

by its acronym CACIF criticized the ouster, saying that outgoing police

Director Nery Ramos had reduced crime. The U.S. Embassy in Guatemala

congratulated Ramos just a few weeks before his dismissal for his team’s work

in reducing homicides by 10% compared to January 2017 and for the PNC’s

“fight against corruption and to improve security throughout Guatemala.”10

In response to the high level of violence over many years, a number of

municipalities asked for military troops to augment their ineffective police

forces; the Guatemalan government has been using a constitutional clause to

have the army “temporarily” support the police in combating crime. Despite

efforts to develop a comprehensive, whole-of-government approach to

security, the previous five administrations’ actions often have been reactive

and dependent on the military. The Morales administration announced a two-

phase plan to remove the military from citizen security operations by the end

of 2017. The new plan includes shuffling military currently involved in citizen

security efforts to the country’s borders to control land routes used by

traffickers and gangs.11 This would be a significant effort to comply with

provisions of the 1996 peace accord calling on the army to focus solely on

7 Carlos Hernández, “Monitoreo Final de PNC Reportó 258 Homicidios Menos en el País,”

Ministerio de Gobernación, January 1, 2017, and “Homicidios bajan a 12.16 por ciento,”

Diario de Centro América, February 7, 2018.
8 “Destituyen a los tres altos mandos policíacos en Guatemala,” Diario 24 Horas, February 28,

2018.
9 Héctor Silva Ávalos, Felipe Puerta, and Kelly Grant, “Ousting of Police Director May Shift

Guatemala’s Balance of Power,” InSight Crime, March 2, 2018.
10 “Ambassador Arreaga supports the efforts of the National Civil Police,” U.S. Embassy in

Guatemala, January 31, 2018.
11 Lorena Baires, “Guatemala Reforzará Sus Fronteras para Cortar Rutas de Narcotráfico,”

Diálogo, April 4, 2017.

Guatemala 181

external threats. The interior minister who initiated the plan, Francisco Rivas,

was fired by the president in January 2018. Morales said that the plan would

continue, however, and military troops would be withdrawn from the streets

by March 31, 2018.12 Morales’s new interior minister, Degenhart Asturias, has

indicated a shift in priorities away from fighting corruption to fighting gangs.

One of his first actions was to ask the Guatemalan Congress to designate

criminal gangs as “terrorist organizations.”13

Morales had already faced criticism for not acting forcefully enough on

his pledge to crack down on corruption, and for his links to family and friends

under investigation, before he tried to expel Commissioner Velásquez.

Attorney General Aldana has said she will resign if the president expels the

head of CICIG, with whom she has worked closely to prosecute high-level

corruption and human rights violation cases. Both Attorney General Thelma

Aldana and the commissioner of CICIG said that the president had not

interfered directly in corruption cases—even those involving his family. But

both also expressed disappointment that he had not spoken out in support of

them and their anti-corruption efforts when attacked by anti-reform elements.

They also voiced concern that Morales has publicly portrayed himself and his

family as victims of the judicial system, potentially biasing the judicial

process.

Initially, President Morales’s political power was limited as a result of his

own inexperience and his party’s weak position in the legislature. Morales’s

small party, the right-wing National Convergence Front-Nation (FCN-

Nación), won 11 of 158 seats in the legislature. The Guatemalan Congress

elected an opposition member to be president of the unicameral chamber. At

the beginning of Morales’s term, deputies defected from other parties, bringing

the FCNNación’s seat total to 37. People criticized Morales for allowing the

deputies to join his party just before the Congress outlawed the practice. The

public prosecutor received complaints alleging that bribery motivated some

defections to the FCN-Nación.14

12 José Meléndez, “Guatemala retira al ejército de las calles,” El Universal, March 8, 2018.
13 “Guatemala seeks to designate criminal gangs as ‘terrorists’,” Agence France Presse, January

29, 2018.
14 “Lack of Reforms Will Undermine Corruption Crackdown,” Business Monitor Online, March

1, 2016.

Maureen Taft-Morales 182

Morales has since formed an alliance able to pass legislation, however, and

consolidated his support in the Congress. In 2017, the legislature twice voted

against prosecutors’ requests to lift the president’s immunity for violations of

campaign finance laws and bonuses paid to him by the military, blocking

further investigations into the president’s role in the scandals. The Congress

tried to weaken anti-corruption laws with a measure to reduce penalties for

illegal campaign financing that the public dubbed the “Pact of the Corrupt.”

Public outcry was so strong that Congress repealed the law two days after

passing it. Nonetheless, the Congress elected a new leadership in February

2018, all of whom, according to the State Department, voted for that pact.

Morales has also come under fire for two contracts with an Indiana

lobbying firm that reportedly has ties to U.S. Vice President Mike Pence.15

The firm was hired to improve relations between the U.S. and Guatemalan

governments outside of normal diplomatic channels. Guatemalan politicians

without the authority to act in foreign affairs signed the contracts. Morales

denies knowing about the contract, though one was signed on his behalf, and

only he and the foreign ministry are authorized to intervene in foreign

affairs.16 Furthermore, observers criticize his reclusiveness with the press: he

has removed journalists’ access to the presidential palace, and rarely holds

press conferences.

Morales’s administration and the secretariat for Social Welfare came

under scrutiny after a fire killed 41 girls in a state-run home in March 2017.

The director of the shelter, the minister of Social Welfare, and his deputy were

dismissed after the fire. Recently, a judge charged the former minister, his

deputy, and five additional people (two police officers with abuse, and three

senior members of social and child protection agencies with manslaughter or

negligence).17

During the campaign, Morales was criticized for a short governing plan

with proposals such as tagging teachers with a GPS device to ensure they

attend classes and giving every Guatemalan child a smartphone in exchange

for advertising on school walls. U.S. embassy officials expressed concern that

15 Nina Lakhani, “Guatemala President Under Pressure over Lobbying Firm Linked to Mike

Pence,” The Guardian, June 23, 2017.
16 Nina Lakhani, “Guatemala President Under Pressure over Lobbying Firm Linked to Mike

Pence,” The Guardian, June 23, 2017.
17 “Guatemala: Officials and Police Charged over Girls Shelter Blaze,” BBC, June 25, 2017.

Guatemala 183

Morales’s campaign team refused to cooperate with certain elements of

Guatemalan civil society, particularly human rights advocates working on the

protection of children and trafficking victims, and LGBTI (lesbian, gay,

bisexual, transgender, intersex) issues.18

Links between Morales’s Party and the Military

Before the current controversy between Morales and CICIG, human rights

and other observers expressed concern that Morales’s party’s ties to former

military officers might put pressure on Morales’s support of CICIG, as well as

limit his government’s investigation of military corruption and human rights

violations. Before the new government was sworn in, Attorney General

Aldana requested legal action against retired army colonel Edgar Ovalle, a key

advisor to Morales and a legislator-elect with the FCN-Nación, for alleged

civil war-era (1960-1996) human rights violations. After declining the request

in 2016, Guatemala’s Supreme Court lifted Ovalle’s immunity in 2017.

Ovalle’s whereabouts have been unknown since March 2017.

Over a dozen other military officers have been arrested on similar charges.

Many of them support the FCN-Nación and belong to a military veterans’

association, Avemilgua, which Ovalle helped found. Avemilgua members

created the FCN-Nación in 2004, and testified in court in defense of former

dictator Efrain Rios Montt in 2013. Rios Montt, found guilty in 2013 of

committing genocide and crimes against humanity during the civil war, had his

conviction effectively vacated a short time later. On January 5, 2016, a judge

suspended a retrial, which began again in March. In 2017, a judge ordered Rios

Montt to stand trial in a different case for the massacre of 201 people between

1982 and 1983 in Dos Erres.19 Morales reportedly said he did not believe

genocide had been committed during the war, but that crimes against humanity

had.20

The Defense Ministry recently said that it has been paying President

Morales a substantial salary bonus since December 2016 (see “Current

Political Tensions” below). Two former presidents, Alfonso Portillo and

18 Communication between U.S. State Department officials and CRS Specialist.
19 Henry Estuardo Pocasangre and Jerson Ramos, “Ríos Montt Enfrentará Juicio Especial por

Masacre de Dos Erres,” Prensa Libre, March 31, 2017.
20 Sarah Blaskey, Jeff Abbott, “The Military Powers Behind Guatemala’s Comedian Presidential

Front-Runner,” Tico Times, October 9, 2015.

Maureen Taft-Morales 184

Alvaro Colom, reportedly said they received no such bonus.21 Morales’s

former defense minister has been arrested in the case.

Attorney General Thelma Aldana and CICIG

On May 17, 2014, Thelma Aldana replaced former Attorney General Claudia Paz y

Paz. Some people questioned if Aldana, a former head of the Supreme Court seen as

favored by then-President Pérez Molina, would pursue corruption and human rights

cases as ardently as her predecessor. Since assuming her role, Aldana has led

investigations resulting in the forced resignation and later arrest of Pérez Molina and

Roxana Baldetti, then vice president. Aldana is pursuing investigations for alleged

illegal campaign contributions by various political parties. She has pushed for special

prosecutors’ offices to deal with cases involving sexual violence and crimes against

women and children. Both the previous and current attorneys general, as well as judges

on prominent cases, have received death threats. Aldana briefly suspended public

activities and left the country after receiving multiple death threats in 2016.22 Aldana’s

term expires in May 2018.

The United Nations and Guatemala agreed to establish CICIG in 2007. Its mandate

is to help Guatemala dismantle illegal groups and clandestine structures responsible for

organized crime, human rights violations, and other crimes through investigations and

prosecutions, as well as to recommend legal reforms. Many experts agree CICIG has

made significant progress in its goals. In 2015 alone, the Public Ministry arrested about

602 public officials for alleged corruption and abuse of office.23 According to public

opinion polls, CICIG and the Public Ministry are the most trusted institutions in

Guatemala.

Efforts to Combat Impunity and Corruption

In what many observers see as a step forward in Guatemala’s democratic

development, the Public Ministry’s recent corruption and human rights abuse

investigations have led to the arrest and trial of high-level government,

judicial, and military officials. They have also led to a backlash against those

reform efforts, threats against the attorney general and the head of an

21 Martin Rodriguez Pellecer, Javier Estrada Tobar, “Aislado y en pie de guerra, asi afrontan

Jimmy y FCN el Paro Nacional,” Nomada, September 20, 2017.
22 Elisabeth Malkin, Nic Wirtz, “Byron Lima Oliva, Bishop’s Killer, Dies in Attack at Guatemala

Prison,” New York Times, July 18, 2016.
23 “Guatemala Corruption Report,” GAN Business Anti-Corruption Portal, August 2016, p. 5,

http://www.businessanti-corruption.com/country-profiles/guatemala.

Guatemala 185

international commission, and a political crisis involving current President

Jimmy Morales. The Public Ministry, which is headed by Attorney General

Thelma Aldana, is responsible for public prosecution and law enforcement,

and works in conjunction with CICIG to strengthen rule of law in Guatemala.

Since 2007, CICIG has worked with the Public Ministry and the attorney

general’s office to reduce the country’s rampant criminal impunity by

strengthening Guatemala’s capacity to investigate and prosecute crime. The

government invited CICIG to assist with constitutional reforms and

restructuring the judicial system. As a result of collaboration with CICIG,

prosecutors have increased conviction rates in murder trials, and targeted

corruption and organized crime linked to drug trafficking. The Guatemalan

public widely supports

CICIG.

The United States, other governments, and international institutions have

expressed broad support for the work of both the attorney general’s office and

CICIG.

The process is currently under way to select a new attorney general in May,

2018, when Aldana’s term expires. Anti-corruption and human rights advocates

express concern that Morales could choose a candidate who will not pursue

corruption cases as effectively as Aldana. A bipartisan group of Members of the

U.S. Congress have called for the selection process to be transparent.

Impeachment of a Former President, Arrest of Another

Public Ministry investigations, coupled with mass public protests, forced

the resignations of the sitting president and vice president in 2015. Attorney

General Aldana and CICIG exposed an extensive customs fraud network, now

known as the “La Linea” case, at the national tax agency (SAT), leading to the

arrest of dozens of people, including the previous and then-directors of the

SAT. After the Guatemalan Congress lifted then-President Otto Pérez

Molina’s immunity so he could be investigated, the attorney general’s office

indicted him, Vice President Roxana Baldetti, and other officials, who then

resigned. The country proceeded lawfully and peacefully to form an interim

government, hold scheduled lawful elections, and elect a new president,

Jimmy Morales, who took office in January 2016.

The related corruption case implicated dozens of high-level government

officials and private-sector individuals as well. Attorney General Aldana

asserted that the “La Linea” case represented “just a sliver of a sprawling

Maureen Taft-Morales 186

criminal enterprise run by the state,” which widely tolerated corruption,

leading to impunity and the strengthening of criminal structures within the

government.24 The attorney general and other observers have raised concerns

about unnecessary delays in the sentencing process due to appeals and other

litigation by defense teams. Baldetti and Pérez Molina remain in prison as

their cases proceed.

Following the historic “La Linea” case, more former and current high-

level officials in the executive branch, the legislature, and the judicial system

have been implicated in corruption cases. Three justices of the Supreme Court

of Justice (CSJ) had their immunity removed to face charges of corruption and

influence trafficking. In late March 2017, authorities arrested various

congressional representatives for corruption. According to Transparency

International, Guatemala ranked 136th out of 176 countries on the

organization’s Corruption Perceptions Index for 2016, the second-worst score

in Central America, behind Nicaragua.

Guatemalan police arrested another former president, Alvaro Colom, in

February 2018. Colom was arrested along with nine former members of his

Cabinet, including former Finance Minister Juan Fuentes Knight, who has

chaired Oxfam International since 2015. The group faces charges related to a

$35 million fraud case involving a new bus system in the capital.

Current Political Tensions

Two days after the attorney general and CICIG announced they were

seeking to lift President Morales’s immunity from prosecution, Morales

declared the head of CICIG, Iván Velásquez, persona non grata and ordered

him expelled from the country. One of Morales’s ministers resigned rather

than carry out the order, and the constitutional court—Guatemala’s highest

court—blocked the order. A Guatemalan congressional committee

recommended that the president lose his immunity. Two-thirds of the 158-

member legislature, or 105 deputies, are needed to remove an official’s

immunity. On September 11, 2017, though, the Guatemalan Congress as a

whole voted to protect the president from further investigation; only 25

deputies voted to remove his immunity. About 20% of the legislators are also

under investigation, with more likely to become so. The legislature fell one

24 The Editorial Board, “A Corruption Crusade in Guatemala,” New York Times, June 11, 2016.

Guatemala 187

vote short of shelving the request permanently, however, so a member of the

Congress may reintroduce the question of lifting President Morales’s

immunity at a later date.

On September 13, the Guatemalan Congress passed a “national

emergency” bill to reduce penalties for violations of campaign finance laws,

and make party accountants—rather than party leaders—responsible for such

violations. Public outcry was such that the Congress repealed the bill two days

later. Thousands of protesters demanded the resignation not only of Morales,

but also of the 107 legislators who voted to weaken anti-corruption laws. On

September 21, the Guatemalan Congress again defeated a vote to lift the

president’s immunity. This time, however, the number voting to rescind his

immunity had risen to 70. In 2015, public protests contributed to the

legislature reversing itself and rescinding the previous president’s immunity.

Morales was losing support within his own government. Several officials

were fired or resigned rather than carry out his order to expel Commissioner

Velasquez. Three Cabinet ministers resigned, saying that as a result of the

political crisis, “spaces of opportunity to carry out our work programmes have

rapidly closed down.”25 Initially, Morales persuaded some of those officials to

stay, but in January 2018 he fired several of them and replaced them with

people he considered stronger allies.

Also in September 2017, Guatemala’s federal auditor said that it is

investigating a substantial salary bonus that the Defense Ministry has

acknowledged paying to the president since December 2016. The monthly

bonus increases Morales’s salary by more than a third, reportedly making him

one of the most highly paid leaders in Latin America.26 Attorney General

Aldana again asked that Morales’s immunity be lifted, this time so that her

office can investigate his bonus from the army. The Congress again voted

against lifting Morales’s immunity from prosecution.

Early in his term, President Morales reached out to policy experts and

international donors for advice on fighting corruption. In April 2016, President

Morales formally requested—and the U.N. granted—the extension of CICIG

25 “Guatemala: 3 Ministers Resign, Citing ‘Political Crisis,’” BBC Monitoring Americas,

September 20, 2017.
26 Sofia Menchu, “Guatemala Federal Auditor to Probe President’s Pay Bonus,” Reuters,

September 12, 2017. Also see http://www.paywizard.org/main/salary/vip-check/world-

leaders-salaries for salary comparisons.

Maureen Taft-Morales 188

until 2019, as its two-year mandate was due to expire in September 2017. His

subsequent efforts to expel CICIG’s commissioner and to question CICIG’s

role, however, have raised serious doubts about his stated commitment to fight

corruption. Public protests in Guatemala have demanded Morales’s

resignation.

Morales said previously that before he left office, he would extend

CICIG’s term again, until 2021.27 In recent months, however, Morales has

suggested that he might not renew CICIG. The U.N. and other members of the

international community, and many Guatemalan civil society organizations,

have expressed strong support for CICIG and its commissioner. A new

organization was launched in February, the Citizens’ Front Against Corruption.

This group of prominent business people, indigenous leaders, academics,

activists, and others expressed public support for both Attorney General Aldana

and CICIG Commissioner Velásquez. U.S. Ambassador to the U.N. Nikki Haley

met with President Morales in Guatemala in February, reporting that “I told him

that we supported CICIG and supported the commissioner.”28 Haley also met

with Aldana and Velásquez, telling them that CICIG should do their job

“quietly. They don’t need to be in the paper every day.”

Judicial Reforms and Efforts to Stop Them

Attorney General Aldana and CICIG have made progress in pursuing

justice for human rights violations that occurred during the civil war. In March

2016 they tried a historic case known as the “Creompaz case”—the first

prosecution for sexual violence committed during the civil war. A Guatemalan

high-risk court convicted two former military commanders at the Sepur Zarco

military base of murder, sexual violence, sexual and domestic slavery, and

enforced disappearances. In March 2017, a judge sent to trial a former military

chief of staff and four other high-ranking military officials accused of crimes

against humanity, aggravated assault, sexual violence, and forced

disappearance. Also in March, the Supreme Court ruled to remove immunity

from FCN-Nación deputy Edgar Ovalle for his alleged involvement in the

27 “Guatemala’s Morales Reiterates Support for Cicig,” LatinNews, October 29, 2015.
28 Michelle Nichols, “U.S. Envoy Tells Guatemala President: We Back U.N. Graft Body, Chief,”

Reuters, February 28, 2018.

Guatemala 189

case.29 As noted previously, Ovalle, a key advisor to President Morales, has

since disappeared. Another case dealing with forced disappearances allegedly

committed by the Guatemalan military during the civil war took a dramatic

turn in March 2016 when a judge seized and made public previously unknown

documents detailing information about military counterinsurgency objectives,

operations, and campaigns from 1983 to 1990. Since the Peace Accords were

signed in 1996, the Guatemalan army had repeatedly denied such documents

existed.

As anti-corruption efforts prove successful, the circle of those feeling

threatened by investigations broadens, and attacks against CICIG and the

judicial system have intensified.30 The U.N. Office of the High Commissioner

for Human Rights (OHCHR) issued a report in March 2017 saying it was

“seriously concerned” about threats and attacks against various judicial

authorities, including both Aldana and Judge Miguel Angel Galvez.31 The

International Commission of Jurists noted concern about efforts to criminalize

lawyers, as well as community leaders, human rights defenders, and public

employees, such as Supreme Court justices.

Civil society groups and elements of the government have called for

further reforms to combat impunity. An April 2017 report from the

International Commission of Jurists found that despite tackling historic cases,

Guatemalan courts still show signs of irregularity and impunity, such as many

judges’ failure to condemn litigation that results in delays of trials. Many of

the accused in the La Linea case still await sentencing almost two years after

the scandal broke, in part because of litigation filed by their own lawyers in

what are widely seen as delaying tactics.

According to CICIG head Iván Velásquez, the work of CICIG and the

attorneys general has resulted in more than 300 people either in prison, facing

trial, or being charged. These include high-level officials, such as the former

president and vice president, five former Cabinet ministers, three former

29 “Diputado Edgar Ovalle pierde su inmunidad y queda arraigado,” Prensa Libre, March 15,

2017.
30 Attorney General Thelma Aldana left the country for a month due to death threats. She, as well

as judges presiding over prominent cases, continue to face death threats and intimidation.

Intimidation has included public and anonymous attempts to discredit the head of CICIG, as

well as other officials, activists, and their organizations.
31 Annual Report of the United Nations High Commissioner for Human Rights on the Activities of

His Office in Guatemala, U.N. General Assembly, A/HRC/34/3/Add.1, March 22, 2017, p.

Maureen Taft-Morales 190

presidents of Congress and various deputies, two former CSJ magistrates, the

former president of the Instituto Guatemalteco de Seguridad Social (IGSS),

two former banking superintendents, and a director of the prison service,

among others.32

President Morales spoke before the U.N. General Assembly in September

2017. He pledged to strengthen and support CICIG, but he also said

Guatemala was revising the interpretation and application of its agreement

with CICIG and no institution should interfere in Guatemala’s administration

of justice.33 On the same day, three of Morales’s Cabinet members resigned

over the political crisis instigated by the president’s effort to expel CICIG’s

commissioner. In February 2018, Morales sent a representative to the U.N. to

express his administration’s concerns about CICIG.

Many in the U.S. Congress have expressed concern over President

Morales’s effort to expel CICIG’s commissioner. The House Foreign Affairs

Committee chairman issued a statement reading, “The U.S. Congress has

spoken with one voice in support of the International Commission against

Impunity in Guatemala. We will continue to stand with the Guatemalan

people, and especially those in poverty, who are hurt most by corruption.”34

The Trump Administration continues to express support for CICIG. U.S.

Ambassador to the U.N. Nikki Haley said that the United States expects the

Guatemalan government to allow CICIG to “do its critical work without

interference.”35 In February 2018 outgoing Secretary of State Rex Tillerson

reiterated the Administration’s support of CICIG.

Various Guatemalan and international organizations consider judicial

reforms necessary to solidify progress against widespread corruption and to

strengthen the judicial branch so it can continue consolidating the rule of law

in Guatemala. Nonetheless, forces opposed to the reforms have emerged as

well.

32 “Latin American Weekly Report,” LatinNews, May 4, 2017.
33 “At UN, Guatemalan President Pledges Government’s Full Commitment to Fight Corruption,”

U.N. News Centre, September 19, 2017.
34 “Chairman Royce Statement on Guatemala,” House Foreign Affairs Committee News Release,

U.S. Government Publishing Office, August 28, 2017.
35 Dudley Althaus, “U.S. Urges Guatemala’s President to Allow Corruption Probe; Comments

from Officials Come a Day After Jimmy Morales Moved to Expel Special Prosecutor,”

Wall Street Journal, August 28, 2017.

Guatemala 191

The Guatemalan Congress approved changes concerning judge and

magistrate selection and requirements. A recent International Commission of

Jurists (ICJ) report concluded that reforming the selection process of judges

and separating judicial processes from administrative processes could

strengthen Guatemala’s judicial system. CICIG and others launched a judicial

observatory of criminal justice to analyze judiciary rulings and make

recommendations to improve the justice system in other ways as well.

The ICJ found that the Guatemalan state has responded passively to

defamation campaigns, attacks on judicial independence, and other forces trying

to influence judges, prosecutors, and investigators.36 According to the director of

the Guatemalan Institute of Comparative Studies in Criminal Sciences, the

groups seeking to stop the reforms are the same elements that launched

defamation campaigns on social media against CICIG head Iván Velásquez in

early 2017.37

Some of the recent actions taken by the Guatemalan legislature represent

efforts to advance various types of reform, whereas others reflect an effort to

reverse or stall reform efforts. The Guatemalan Congress passed two major

reform packages in 2016 after then-President Otto Perez Molina was forced to

resign and was arrested on corruption charges in 2015. The reform packages

were designed to streamline legislative procedures and make political and

electoral system procedures more transparent and equitable. A lengthy national

process produced 60 proposed amendments to the constitution and other laws

to promote judicial reform. Congress did not pass an initial package of the

reforms in 2016 and did not bring it up again in 2017. The most divisive

proposed change was a stronger recognition and use of the indigenous justice

system.

Some observers expressed concern that the new leaders who assumed

office in January 2016 either lack the ability to form the alliances necessary to

push the constitutional reforms through, or were less committed to doing so

due to their links to people under investigation for corruption.38 This latter

view was reinforced by congressional actions in September 2017 preserving

36 Carlos Rafael Rodríguez Cerna Rosada, La Independencia Judicial en Guatemala,

International Commission of Jurists, November 2016.
37 “Se Plantean 60 Enmiendas a Reformas,” Prensa Libre, February 13, 2017.
38 Adriana Beltrán, “Guatemala at a Crossroads: Reinforce the Fight Against Corruption or

Reinstate the Hidden Powers?” Washington Office on Latin America, December 12, 2016.

Maureen Taft-Morales 192

the president’s immunity and trying to reduce penalties for violations of

campaign finance laws.

Nonetheless, the legislature passed two laws in late 2017 intended to

improve the judicial process. One created a Judicial Career Council to relieve

the Supreme Court of having to address internal human resources

administrative matters, and the other created a National Bank of Genetic Data

to be used in judicial processes as well as a Register of Sexual Aggressors.

ECONOMIC AND SOCIAL CONDITIONS

Guatemala has enjoyed relatively stable economic growth in recent

decades, and the World Bank named it a top performer in Latin America.

Guatemala has struggled, however, in recent years to address its high poverty

rates. The country has the largest economy in Central America, with a gross

domestic product (GDP) of $63.794 billion and a per-capita income of $3,590

in 2015.39 The World Bank characterizes Guatemala as a lower-middle-income

country, and it ranks 125th out of 188 on the 2015 Human Development Index.

Guatemala’s stable growth rates have not been enough to decrease some of

the highest levels of economic inequality and poverty in the region. Instead,

Guatemala has backtracked. After decreasing the overall poverty rate from 56%

to 51% between 2000 and 2006, the rate increased to 59% in 2014, with a rate

just over 79% for indigenous people, according to a national survey. Some

elements of Guatemalan society and government have tried to bring about

equitable development, yet its rural and indigenous populations remain socially

and economically marginalized. For rural municipalities, which constitute 44%

of the country, almost 8 out of 10 people live in poverty.40 Demonstrating the

difference in economic and social conditions, literacy rates for the

nonindigenous population were 88.9% for men and 83.7% for women, but rates

decreased to 77.7% for indigenous men and 57.6% for indigenous women 15

years and older.41

39 World Bank data online, at http://data.worldbank.org/country/guatemala,
40 World Bank, Guatemala: Overview, accessed March 29, 2017, http://www.worldbank.org/en/

country/guatemala/overview.
41 Instituto Nacional de Estadística Guatemala, República de Guatemala: Encuesta Nacional de

Condiciones de Vida 2014, December 2015, https://www.ine.gob.gt.

Guatemala 193

The International Monetary Fund (IMF) concluded that Guatemala met

none of the Millennium Development Goals for rural and indigenous

populations in 2015 and met only a quarter of them for the country as a

whole.42 Furthermore, extreme poverty increased and school enrollment

decreased. Nonindigenous children average twice as many years of schooling

as indigenous children.43 To improve social conditions, the World Bank calls

for rapid economic growth coupled with increased public investment and pro-

poor policies. According to the Economist Intelligence Unit (EIU),

Guatemala’s economic growth rate is expected to average out at 3.1% in 2017.

EIU projects growth will likely peak in 2018-2019 at 3.2%, followed by a

slowdown to 2.4% for 2020.44 The EIU concludes that slowed economic

growth and rapid population growth will keep per-capita income growth too

low to reduce poverty.

Factors that impede economic growth and development include

corruption, limited government revenues, weak institutions, and weak

transportation and energy infrastructure. Guatemala’s persistent failure to

deliver services and improve the quality of education and health care

contribute to a low-skilled workforce, which also limits growth. According to

the U.N. Educational, Scientific, and Cultural Organization (UNESCO),

Guatemalan adults had only 3.6 years of education, on average, in 2005, and

“if Guatemala had matched the regional average, it could have more than

doubled [emphasis in original] its average annual [economic] growth rate

between 2005 and 2010.”45

Guatemala has the lowest tax-to-GDP ratio in the region at 12.4%,

compared to 22.8% for Latin America in 2015.46 This is due in part to the high

rate of employment in the informal economy— the Instituto Nacional de

Estadística found that 69.8% of the population held informal employment in

2016, with higher percentages for rural and indigenous segments of the

42 International Monetary Fund Western Hemisphere Department, IMF Executive Board

Concludes 2016 Article IV Consultation with Guatemala, International Monetary Fund,

September 2016, http://www.elibrary.imf.org.
43 UNDP, Human Development Report 2016, March 2017, http://hdr.undp.org/sites/default/files/

2016_human_development_report .
44 EIU, Guatemela Country Report, generated February 14, 2018, p. 35.
45 UNESCO, “Education Transforms Lives,” 2013, p. 7.
46 Organisation for Economic Co-operation and Development, Revenue Statistics in Latin

America and the Caribbean 2017, March 23, 2017.

Maureen Taft-Morales 194

population.47 Another contributing factor includes the business and elite

sectors’ historical resistance to paying taxes. While the Morales administration

has improved tax collection (see “President Jimmy Morales’s

Administration”), the IMF has called for a tax revenue rate increase to at least

15% of GDP in order to address social, security, and infrastructure needs.48

Land conflicts, especially those involving mining, are contentious, and

often violent, in Guatemala and elsewhere throughout the region.49

Governments often see mines as a source of revenue, potentially for poverty

reduction and social programs. Indigenous populations often object to mining

under current conditions, however, because they say it violates their ancestral

land rights, removes them from and/or damages their source of livelihood,

and/or excludes them from the decisionmaking process as to how mine profits

should be spent. Guatemala is a signatory to the Indigenous and Tribal Peoples

Convention, 1989, also known as the International Labour Organization’s

(ILO’s) Convention 169. The treaty calls on governments to consult indigenous

peoples before permitting exploitation of natural resources on their land.

According to a recent report by the ILO, the Guatemalan government granted

367 mining licenses between its ratification of the convention in 1996 and

2014, and held only 60 community consultations, all of which had expressed

opposition to the projects.50 The report found that Guatemala’s Constitutional

Court had found such consultations nonbinding. Guatemala has not developed

regulations to govern prior consultations.

Ongoing conflicts around land use are likely to continue to delay such

projects. Other types of land conflicts and evictions are related to biofuels,

dams, ranching, and drug trafficking; these are also frequently violent.

47 Instituto Nacional de Estadística Guatemala, Estadística: Tema/Indicadores, February 2018,

https://www.ine.gob.gt/ index.php/estadisticas/tema-indicadores.
48 IMF, op. cit.
49 For example, seven Guatemalan protesters recently won the right to sue a Canadian mining

company in Canadian courts for injuries sustained when Tahoe Resources security guards

sprayed protesters with rubber bullets outside the Guatemalan Escobal mine with rubber

bullets in 2013. “Supreme Court Clears Way for Lawsuit by Mine Protesters in Guatemala,”

Vancouver Sun, June 8, 2017.
50 Organización Internacional del Trabajo, Convenio núm. 169 de la OIT Sobre Pueblos

Indígenas y Tribales en Países Independientes y la Consulta Previa a los Pueblos Indígenas

en Proyectos de Inversión. Reporte Regional: Colombia, Costa Rica, Guatemala, Chile,

Lima, OIT, Oficina Regional para América Latina y el Caribe, 2016. Findings cited here are

on pp. 46, 34, and 15, respectively.

Guatemala 195

Coffee production and prices recovered from a recent decline, and are

expected to help growth in the agricultural sector. Remittances from

Guatemalans abroad boost the Guatemalan economy as they constitute over

10% of the GDP. Remittances grew by almost 15% in 2017, to the highest

level in any year to date.51 Private consumption accounts for 85% of GDP.

U.S.-GUATEMALAN RELATIONS

Traditionally, the United States and Guatemala have had close relations,

with friction at times over human rights and civil/military issues. According to

the State Department, current U.S. policy objectives in Guatemala include

supporting the institutionalization of democracy; encouraging respect for

human rights and rule of law, and the efficient functioning of CICIG;

supporting broad-based economic growth and sustainable development and

maintaining mutually beneficial trade and commercial relations, including

ensuring that benefits of CAFTA-DR reach all sectors of Guatemalan society;

cooperating to fight money laundering, corruption, narcotics trafficking, alien

smuggling, trafficking in persons, and other transnational crimes; and

supporting Central American integration through support for resolution of

border and territorial disputes.52

During his confirmation hearings in January 2017, then-Secretary of State

Rex Tillerson testified that the Trump Administration would continue to support

CICIG and provide foreign assistance to Central American allies to help combat

crime and impunity, and ensure that citizens of those countries have access to a

functioning and fair justice system. The next month, then-Homeland Security

Secretary John Kelly met with President Morales and Commissioner Velásquez

in Guatemala, and reiterated U.S. support for the Public Ministry’s and CICIG’s

fight against corruption.53 On the same day, a U.S. court indicted former

Guatemalan Vice President Roxana Baldetti and former Interior Minister

51 EIU, Guatemala Country Report generated on February 14, 2018, p. 35.
52 U.S. Department of State, “U.S. Relations with Guatemala,” Fact Sheet, December 8, 2016,

accessed October 2, 2017.
53 U.S. Embassy, Guatemala, tweet, @usembassyguate, February 22, 2017, http://pic.twitter.com/

xkY8mg66rs.

Maureen Taft-Morales 196

Mauricio Lopez Bonilla on criminal drug trafficking charges.54 A Guatemalan

court approved a request for Baldetti’s extradition in June 2017, but first she will

face prosecution on four charges of corruption in Guatemalan courts.55 Lopez

Bonilla must first face three counts of corruption in Guatemalan courts. The

United States arrested former Guatemalan presidential candidate Manuél

Baldizón as he entered the country in January 2018. The U.S. Embassy in

Guatemala said the United States would “return Mr. Baldizón to Guatemala to

face justice”; he faces charges of bribery, conspiracy and money-laundering

related to helping the Odebrecht company win construction contracts in

Guatemala. The Odebrecht scandal is enveloping politicians across Latin

America. Baldizón requested asylum in the United States.56

U.S. Vice President Mike Pence, Tillerson, Secretary of Commerce

Wilbur Ross, Kelly, and Secretary of the Treasury Steven Mnuchin attended

meetings with President Morales, as well as his Honduran counterpart and the

Salvadoran vice president, in June 2017 at the Conference on Prosperity and

Security in Central America in Florida. Pence said that addressing migration to

the United States requires strengthening the sending countries’ economies,

including through foreign assistance.57 The Trump Administration has

proposed cutting aid to Central America by 30% compared to FY2017 and

emphasizing security over development.

President Morales followed President Trump’s lead in December 2017 in

announcing his country would move its embassy in Israel to Jerusalem from

Tel Aviv. The change has been widely criticized internationally. In February

2018, Trump met with Morales in Washington, thanking him for his support

on Israel. According to the White House, Trump “also underscored the

importance of stopping illegal immigration to the United States from

54 U.S. Embassy, Guatemala, tweet, @usembassyguate, “Roxana Baldetti and Mauricio Lopez

Bonilla indicted in US Court,” press release, February 24, 2017, http://pic.

twitter.com/W2NQo5AMMg.
55 Associated Press, “Guatemala Court, ex-VP Baldetti Accept Her Extradition to US,” June 15,

2017.
56 Sofia Menchu, “Guatemala businessman, wanted on graft charges, seeks U.S. asylum,”

Reuters, January 21, 2018.
57 Ben Fox, Gisela Salomon, “US, Central America Work Toward Common Ground at Security

Conference,” Associated Press, June 16, 2017.

Guatemala 197

Guatemala and addressing Guatemala’s underlying challenges to security and

prosperity.”58

U.S. Foreign

Assistance

The United States has been providing assistance to Guatemala through

regional initiatives: the Central American Regional Security Initiative

(CARSI), for combating narcotics trafficking and preventing transnational

crime; the President’s Emergency Plan for AIDS Relief (PEPFAR); and Food

for Peace. Currently, U.S. assistance to Guatemala is guided by the U.S.

Strategy for Engagement in Central America. The various programs are

integrated for a greater impact in the Western Highlands region of the country,

which has the highest rates of poverty and chronic malnutrition in Guatemala.

According to the State Department, “The overall objective of U.S. assistance

efforts is to create effective structures and organizations sustainable by the

Guatemalan government.” While some structures, such as the attorney

general’s office, have greatly improved their effectiveness with U.S. and other

support, other institutions remain weak.

Top priorities for U.S. bilateral assistance to Guatemala include improving

security, governance, and justice for citizens; improving economic growth;

improving food security and reducing chronic malnutrition; providing access

to health services and fostering adoption of healthy behaviors at the household

level; promoting better educational outcomes; providing opportunities for out-

of-school youth to reduce their desire to migrate; and improving natural

resource management to mitigate the impact of climate change.59

In 2014, the Obama Administration launched the U.S. Strategy for

Engagement in Central America (the Strategy), a whole-of-government

approach aimed at addressing the root causes of illegal immigration from the

region by improving prosperity, regional economic integration, security, and

governance.60 Congress has appropriated $1.4 billion for the Strategy. Much of

58 “Readout of President Donald J. Trump’s Meeting with President Morales of Guatemala,” The

White House, February 8, 2018.
59 U.S. Department of State, 2017 International Narcotics Control Strategy Report, March 2017.
60 See CRS Report R44812, U.S. Strategy for Engagement in Central America: Policy Issues for

Congress, by Peter J. Meyer.

Maureen Taft-Morales 198

the aid has yet to be delivered, however, and the 115th Congress and the Trump

Administration are reassessing U.S. policy in Central America. Through the

2016 Consolidated Appropriations Act (P.L. 114-113), Congress provided up

to $750 million in aid to Central America and placed numerous conditions on

aid. The State Department certified that the governments of Guatemala (and El

Salvador and Honduras) met Congress’s conditions, which included taking

steps to combat corruption, prosecute security forces for human rights

violations, and other actions. Consequently, FY2016 money began flowing to

the region in early 2017. The Strategy complements the Plan of the Alliance

for Prosperity (AFP) in the northern triangle proposed by the presidents of El

Salvador, Guatemala, and Honduras (see “Regional Alliance for Prosperity

(AFP) and Security Initiatives” below).

On May 5, 2017, President Trump signed into law the Consolidated

Appropriations Act, 2017 (P.L. 115-31), which provides $655 million for the

continued implementation of the Strategy, with just under $126 million for

Guatemala and $329 million for CARSI.61

The funds appropriated for Guatemala include $110 million for

Development Assistance (DA); $1.74 million for Foreign Military

Financing

(FMF); $13 million for Global Health Programs through the U.S. Agency for

International Development (USAID); and $800,000 for International Military

Education and Training (IMET). The measure also provides at least $6.5

million through Economic Support Fund (ESF) for forensic anthropology

assistance in six countries, including Guatemala; at least $6 million in

International Narcotics Control and Law Enforcement (INCLE) funding for

Central America and Mexico to combat human trafficking; $6 million through

CARSI to support CICIG; and $11 million mostly through CARSI ($500,000

through DA) to support the attorney general/Public Ministry. The act

maintains FY2016 conditions with slightly different language.

The Administration’s FY2018 budget request would cut funds by 36% for

Guatemala and 20% for CARSI compared to FY2017. The request includes

around $81 million for Guatemala, an overall decrease of almost $50 million

from the FY2017 funding estimate (see Table 1). It includes approximately

$77 million for Economic Support and Development Fund (ESDF); $3 million

61 U.S. bilateral assistance in 2017 included $5 million in food aid (as seen in Table 1), but this is

not included in the Strategy total because food aid is considered outside of the Strategy.

Guatemala 199

for Global Health Programs (USAID); and $760,000 for International Military

Education and Training. President Trump’s preliminary 2018 proposal

recommends replacing DA and ESF with ESDF. The Administration’s

FY2019 budget request proposed cutting aid to Guatemala by 40% compared

to FY2017 assistance. The budget request for Central America would tip the

balance toward security and away from traditional development goals—such

as good governance, economic growth, and social welfare.

Table 1. U.S. Bilateral Assistance to Guatemala by Account

and Fiscal Year (in thousands of U.S. dollars)

FY2015

Actual

FY2016

Actual

FY2017

Actual

FY2018

Request

FY2019

Request

FY2017-

FY2019

Increase/

Decrease

Development

Assistance

57,387 112,000 110,000 — — —

Economic Support

Fund

34,000 — — — — —

NEW IN FY2018:

Economic Support

and Development

Fund (Pre FY2018 DA

+ ESF, to compare)

(91,387) (112,000) (110,000) 76,900 65,649 (-44,351)

Foreign Military

Financing

1,000 1,740 1,740 0 0 -1,740

Global Health

Programs-

14,000 13,000 13,000 3,000 3,000 -10,000

USAID

International Military 798 775 753 760 760 +7

Education and Training

P.L. 480 Title II 5,914 3,711 5,000 0 -5,000

TO TAL 113,099 131,226 130,493 80,660 69,409 -61,084

Sources: U.S. Department of State, Congressional Budget Justification for Foreign Operations:

FY2015-2019.

The Administration’s proposed budget would also eliminate traditional

food aid (P.L. 480, Title II), and food aid would be provided only through the

International Disaster Assistance account. Some critics are concerned that

Maureen Taft-Morales 200

reducing nonemergency food aid could increase the already high levels of

malnutrition and stunting in Guatemala. In addition, a recent study by several

major international organizations found that “there is clearly a link between

food insecurity and emigration from [Guatemala, El Salvador and

Honduras].”62

The Trump Administration also would have eliminated the Inter-American

Foundation (IAF), an independent U.S. agency that supports grassroots

development throughout Latin America, including in all three northern triangle

countries. Many IAF programs in Guatemala are in areas that have high levels

of emigration to the United States; these programs aim to improve agricultural

and food production; improve the livelihoods of youth, women, and

indigenous people; and ease the transition of migrants who return to

Guatemala.63

Regional Alliance for Prosperity (AFP) and Security Initiatives

The Obama Administration and some Members pressed the northern

triangle governments (Guatemala, Honduras, and El Salvador) to invest more

heavily in their own development and security. In response to the Central

American immigration crisis in 2014, the Guatemalan, Salvadoran, and

Honduran governments proposed the Plan of the Alliance for Prosperity in the

northern triangle later that year, with the help of the Inter-American

Development Bank. The five-year, $22 billion initiative seeks to (1) stimulate

the productive sector to create economic opportunities; (2) develop human

capital through improved education, job training, and social protections (health

care, nutrition); (3) improve public safety and access to the legal system; and

(4) strengthen institutions and improve transparency to increase public trust in

the state.64 Some observers, including some U.S. officials, criticized the initial

62 Inter-American Development Bank, International Fund for Agricultural Development,

International Organization for Migration, Organization of American States, and the World

Food Programme, Food Security and Emigration: Why People Flee and the Impact on

Family Members Left Behind in El Salvador, Guatemala, and Honduras, August 2017.
63 “Guatemala,” Inter-American Foundation, accessed March 26, 2018, https://www.iaf.gov/our-

work/where-we-work/country-portfolios/guatemala.
64 See El Salvador, Guatemala and Honduras, Plan of the Alliance for Prosperity in the Northern

Triangle: A Road Map, September 2014, http://iadbdocs.iadb.org/wsdocs/get document.

Guatemala 201

plan for not focusing on development and poverty-reduction efforts in the

poorest regions, from which the highest numbers of people emigrate. The

Guatemalan Embassy says that the government has since shifted some of its

programs toward those regions.

In November 2016, Guatemala, Honduras, and El Salvador launched a

trinational task force to address the region’s security issues. The task force

focuses on greater border protection, undertaking operations to dismantle

gangs and criminal structures, taking action against human trafficking,

cracking down on terrestrial drug trafficking across borders, and stopping the

flow of contraband products through the northern triangle.65 The initiative

includes increased information sharing and cooperation among the three

countries’ governments, as well as law enforcement and investigative

agencies.

Trade and CAFTA-DR66

Guatemala and the United States have significant trade relations, and are

part of the U.S.-Central America-Dominican Republic Free Trade Agreement

(CAFTA-DR), implemented in 2006. Supporters of CAFTA-DR point to

reforms it spurred in transparency, customs administration, intellectual

property rights, and government regulation. Critics note that the commercial

balance between the two countries previously favored Guatemala, and that

Guatemala already had duty-free access under the Caribbean Basin Initiative.

Since CAFTA-DR, the balance has shifted in favor of the United States. The

U.S. goods trade surplus with Guatemala reached $1.9 billion in 2016, an

11.9% increase from 2015. From 2005 (pre-CAFTA-DR) to 2015, U.S.

aspx?docnum=39224238. See CRS Report R44812, U.S. Strategy for Engagement in

Central America: Policy Issues for Congress, by Peter J. Meyer.
65 “Presidente Hernández Asegura que ‘Fuerza Trinacional’ con El Salvador y Guatemala Va Por

Buen Camino,” La Tribuna, January 5, 2017.
66 Information in this section is from Office of the U.S. Trade Representative, “In the Matter of

Guatemala – Issues Relating to the Obligations Under Article 16.2.1(a) of the CAFTA-DR,”

https://ustr.gov/issue-areas/labor/bilateral-andregional-trade-agreements/guatemala-submiss

ion-under-cafta-dr, accessed June 27, 2017; Kevin Banks, et al., “Dominican Republic –

Central America – United States Free Trade Agreement Arbitral Panel Established Pursuant

to Chapter Twenty: In the Matter of Guatemala—Issues Relating to the Obligations Under

Article 16.2.1(a) of the CAFTA-DR, Final Report of the Panel,” June 14, 2017; and Isabelle

Hoagland and Jenny Leonard, “Sources: U.S. Loses to Guatemala in FTA Labor Dispute

Settlement Case,” World Trade Online, June 22, 2017. Trade data in this section are from

Global Trade Atlas.

Maureen Taft-Morales 202

exports to Guatemala increased by 106%, whereas Guatemalan exports to the

United States increased by only 31% during the same period.67 President

Trump has ordered reviews of U.S. trade agreements.68

Total U.S.-Guatemala trade in 2016 reached $9.8 billion, and U.S. exports

to Guatemala amounted to $5.8 billion. Mineral fuels, electrical machinery,

articles donated for relief, machinery, and cereals accounted for the majority

of U.S. exports. U.S. agricultural exports include corn, soybean meal, wheat,

poultry, and cotton. U.S. imports from Guatemala amounted to about $3.9

billion, with bananas, plantains, knit apparel, woven apparel, coffee, silver,

and gold accounting for the majority. Guatemala was the United States’ 43rd-

largest trading partner in 2016.

The U.S. Labor Department initiated a dispute settlement process alleging

that the Guatemalan government violated its CAFTA-DR labor commitments,

the first labor rights complaint lodged under a U.S. free trade agreement. In

August 2011, the U.S. Trade Representative officially requested an arbitral

panel. In June 2017, the panel concluded that although it agreed that

Guatemala had failed to effectively enforce its labor laws in certain cases, the

United States had failed to prove that the lack of enforcement negatively

affected trade, as required under CAFTADR. The two parties must now agree

on the resolution of the dispute, which normally conforms to the

determinations of the panel. Some observers say the finding could bring into

question the effectiveness of labor regulations in U.S. free trade agreements

and could affect the renegotiation of NAFTA.

Counternarcotics Cooperation

Guatemala remains a major transit country for cocaine and heroin

trafficked from South America to the United States. Guatemala’s porous

borders and lack of law enforcement presence in many areas enables minor

poppy and opium production, as well as smuggling of precursor chemicals,

67 This and the data that follow are from Office of the U.S. Trade Representative, Guatemala:

U.S.-Guatemala Trade Facts, https://ustr.gov/countries-regions/americas/guatemala,

accessed June 5, 2017.
68 Gregory Korte, “On His 100th Day in Office, Trump Orders Review of Free Trade

Agreements,” USA Today, May 1, 2017.

Guatemala 203

narcotrafficking, and trafficking of weapons, people, and other contraband.

Unlike former President Pérez Molina, current President Morales opposes

legalization of illicit drugs. According to the State Department, an estimated

1,000 metric tons of cocaine are smuggled through the country every year. In

2016, Guatemala recorded record drug seizures, captured high-profile

criminals, and underwent leadership changes in most law enforcement

agencies. The United States provides assistance in the areas of vetted units,

training, and information sharing. The 2017 International Narcotics Control

Strategy Report (INCSR) highlighted the above improvements in Guatemala’s

drug control and border security, but noted the following:

The Guatemalan government will not succeed in building sustainable

counternarcotics mechanisms until it fully implements its laws, reforms

law enforcement and judicial institutions, accelerates judicial processes,

improves interagency cooperation, and provides adequate financial

support to relevant agencies and government ministries.69

Corruption within the Guatemalan government has enabled illicit drug

trafficking. The U.S. Department of Justice requested the extradition of former

Interior Minister Lopez Bonilla, who oversaw the Guatemalan police and

prisons under the Perez Molina administration. The Justice Department

reportedly said that Lopez Bonilla received money from various drug cartels,

including the notorious Los Zetas, in exchange for allowing them to operate

freely across Guatemala.70

Migration Issues

More than 1.3 million Guatemalans live in the United States, of which the

Pew Research Center estimates some 525,000 to be unauthorized.71 From the

1970s to 1990s, the civil war fueled some migration. During the 2000s,

69 U.S. Department of State, 2017 International Narcotics Control Strategy Report, March 2017.
70 Louisa Reynolds, “Former Guatemala Interior Minister Accused of Receiving Money from Los

Zetas,” Noticen, August 17, 2017.
71 Anna Brown and Renee Stepler, Statistical Portrait of Hispanics in the United States, 2014,

Pew Research Center, April 2016; Unauthorized Immigrant Population Trends for States,

Birth Countries and Regions, Pew Research Center, November 2016.

Maureen Taft-Morales 204

migration became motivated by socioeconomic opportunities, natural

disasters, social violence, and family reunification. Unlike their neighbors in

the region, Honduras and El Salvador, Guatemalans have not received

Temporary Protected Status (TPS), which offers immigration relief from

removal under specific circumstances.72 Some Guatemalans benefit from the

Deferred Action for Child Arrivals (DACA) program, which allows people

without lawful immigration status who came to the United States as children

and meet certain requirements to request deferred removal for two years,

subject to renewal.73 On September 5, 2017, the Trump Administration

announced plans to phase out the DACA program over the next six months.74

President Trump later tweeted that if Congress did not pass DACA-like

legislation by that time, he would “revisit” the issue.75 As of the date of this

chapter, no such legislation has been passed. Due to federal court orders in

January and February 2018, DACA renewals are once again being accepted;

new applications for DACA, however, are not.76

From FY2009 to FY2014, the number of unaccompanied migrant children

(sometimes referred to as Unaccompanied Alien Children, or UAC) from

Guatemala apprehended at the U.S. border rose from 1,115 to 17,057, causing

concern among Congress and the executive branch.77 In 2015, the number of

unaccompanied minors apprehended at the border decreased to 13,589, then

fell sharply in FY2016 to 7,520.

To offer a safer alternative to illegal immigration, the U.S. government

launched the Central American Minors (CAM) Refugee/Parole program in

December 2014. The program allows children living in El Salvador,

Guatemala, and Honduras, whose parents reside legally in the United States, to

apply for legal entry to the United States. In July 2016, the U.S. government

72 See CRS Report RS20844, Temporary Protected Status: Overview and Current Issues, by Jill

H. Wilson.
73 See CRS Report R44764, Deferred Action for Childhood Arrivals (DACA): Frequently Asked

Questions, by Andorra Bruno.
74 U.S. Department of Justice, Office of Public Affairs, “Attorney General Sessions Delivers

Remarks on DACA,” Washington, DC, September 5, 2017.
75 Sophie Tatum, “Trump: I’ll ‘revisit’ DACA If Congress Can’t Fix in 6 Months,” CNN,

September 6, 2017.
76 See CRS Legal Sidebar LSB10057, District Court Enjoins DACA Phase-Out: Explanation and

Takeaways, coordinated by Hillel R. Smith and Ben Harrington.
77 U.S. Customs and Border Protection, “Southwest Border Unaccompanied Alien Children

Statistics FY2016,” accessed February 2018, https://www.cbp.gov/site-page/southwest-

border-unaccompanied-alien-children-statistics-fy2016.

Guatemala 205

expanded the CAM program to include additional family members. According

to State Department data, 30 Guatemalans left for the United States under

refugee status and 31 as parolees between the program’s start in December

2014 and March 2017. The CAM program will continue under the Trump

Administration, but remains subject to the suspension of larger U.S. refugee

admissions programs. According to the U.N. High Commissioner for

Refugees, 62% of unaccompanied migrant children interviewed in 2013 did

not mention serious harm as a reason for leaving Guatemala, and 84% cited

hopes for family reunification, increased work or study opportunities, or

helping their families as motivation for coming to the United States.78

The U.S. Strategy for Engagement in Central America and the Central

American Plan of the Alliance for Prosperity in the northern triangle were

developed in large part as a response to the immigration crisis in 2014. They

represent efforts to spur development and reduce illegal emigration to the

United States.

Intercountry Adoption

U.S. laws and policies concerning intercountry adoption are designed to

ensure that all children put up for adoption are truly orphans, and have not

been bought, kidnapped, or subjected to human trafficking, smuggling, or

other illegal activities. Similarly, the goals of the Hague Convention on

Protection of Children and Cooperation in Respect of Intercountry Adoption

are to ensure transparency in adoptions to prevent human trafficking, child

stealing, or child selling, and to eliminate confusion and delays caused by

differences among the laws and practices of different countries. Both the

United States and Guatemala are party to the convention. Because Guatemala

has not yet established regulations and procedures that meet convention

standards, the convention has not entered into force there.

In FY2007, U.S. citizens adopted 4,726 children from Guatemala, more

than from any other country except China (5,453 adoptions). When the

convention went into effect in the United States in 2008, adoptions from

Guatemala were suspended because Guatemala was not in compliance with the

convention’s standards. Since then, the only cases of adoptions by U.S.

78 U.N. High Commissioner for Refugees, Children on the Run: Unaccompanied Children

Leaving Central America and Mexico and the Need for International Protection, May 2014.

Maureen Taft-Morales 206

citizens of Guatemalan children that have been permitted are those that were

already in-process on December 31, 2007.79 There were about 3,000 such

adoption cases pending at the time. As of 2016, all but 3 cases had been

resolved. The U.S. and Guatemalan governments have continued to work

together to resolve the pending cases. Representatives of Guatemalan

adoption-related institutions say that their priority is “to strengthen their

processes and institutions in support of domestic alternatives for children …

[and that] this needs to occur before they will consider reopening intercountry

adoptions.” The State Department’s Office of Children’s Issues supports those

efforts, while also advocating for Guatemala to develop intercountry adoption

procedures as another option for children who cannot find permanent homes

within Guatemala.

79 This and the following information is from the U.S. Department of State, Intercountry

Adoption, “Guatemala: Hague Convention Information,” accessed by CRS on February 16,

2018, https://travel.state.gov/content/adoptionsabroad/en/country-information/learn-about-

a-country/guatemala.html.

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Review:

The U.S. Intervention in Guatemala: The Documentary Record

Reviewed Work(s): Foreign Relations of the United States, 1952–1954: Guatemala by
Review by:

STEPHEN G. RABE

Source: Diplomatic History, Vol. 28, No. 5 (November 2004), pp. 785-790
Published by: Oxford University Press
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STEPHEN G. RABE

FEATURE REVIEW

The U.S. Intervention in Guatemala: The Documentary Record

U.S. Department of State. Foreign Relations of the United States, 1952-1954: Guatemala.

Washington, DC: U.S. Government Printing Office, 2003. 461 pp. $41.00
(hardcover).

“Bomb repeat Bomb” telegraphed a panicky JMBLUG to Ascham. Calligeris
was in danger; his “assets” were “too small.” If “we fail to bomb,” JMBLUG
warned, we will be guilty of “what William James called ‘atrocious harmless
ness.'” The 19 June 1954 telegram went through the CIA station chief in
Guatemala City to CIA headquarters. The author, ambassador to Guatemala
John E. Peurifoy (JMBLUG), implored CIA Director Allen Dulles (Robert A.
Ascham) to drop the pretense of nonintervention and openly aid the tiny,
hapless invading army led by Colonel Carlos Castillo Armas (Calligeris) (p.
352). Operation PBSUCCESS, the U.S. campaign to destroy the popularly
elected government of Jacobo Arbenz Guzman of Guatemala (1950-54),
depended upon persuading or intimidating Guatemalan military officers into
overthrowing President Arbenz. Ambassador Peurifoy’s reasoning carried the
day. President Dwight D. Eisenhower authorized supplying aircraft to the
Guatemalan rebels. On 27 June 1954, President Arbenz announced his resig
nation. In the happy postmortem on Operation PBSUCCESS, CIA analysts
concluded that “Air Support provided the clincher to the operation” and
that “the psychological effect of fighter air support was tremendous and
added to the myth that Calligeris’s Army was an organized, unbeatable force”
(p. 424).

The two documents cited above are among approximately three hundred
documents now available to scholars in this new volume in the U.S. State

Department’s Foreign Relations (FRUS) series. In this volume on Guatemala, the
State Department’s Office of the Historian addresses an appalling incident in
the history of its distinguished series. In 1983, it released the volume on the
American Republics, 1952-1954, which included a section on U.S. policy toward
Guatemala.1 The documents did not demonstrate, however, that the CIA had

intervened in Guatemala. In the 1980s, the Ronald Reagan administration had

i. FRUS, 1952-1954, vol. 4: The American Republics (Washington, DC, 1983), 1027-1239.

Diplomatic History, Vol. 28, No. 5 (November 2004). © 2004 The Society for Historians
of American Foreign Relations (SHAFR). Published by Blackwell Publishing, Inc., 350 Main
Street, Maiden, MA, 02148, USA and 9600 Garsington Road, Oxford OX4 2DQ, UK.

7«5

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786 DIPLOMATIC HISTORY

sharply restricted what the public could read about the nation’s foreign policy
past. President Reagan’s Executive Order 12356 (1982) permitted the contin
ued classification of documents relating to intelligence activities, foreign gov
ernment information, and even to the “foreign relations or foreign activities
of the United States”—the very purpose of the FRUS series. The order also
allowed for the reclassification of public material. Blanche Wiesen Cooke,
who among others in the 1970s had used the Freedom of Information Act and
the mandatory declassification process to open records on the Eisenhower
administration’s attack on President Arbenz, estimated that two-thirds of the

Guatemala material was reclassified “during the informational slash and burn
years of the Reagan administration.”2 The esteemed Bryce Wood sadly con
cluded that the listed editors of FRUS volumes had been reduced to mere anno

tators or compilers. The real editors were State Department, CIA, and NSC
officials who decided which documents would remain classified.3

In the pretace to this new volume, the Historical Uffice concedes the obvious
about the American Republics, 1952-1954 volume, noting that “the historian who
collected and prepared the volume knew that the compilation on Guatemala as
published was incomplete and flawed.” The Historical Office asserts that its staff
actually debated whether the volume should include a disclaimer indicating that
the Guatemalan section provided “an incomplete and distorted history” (p. iv).
Although the professional staff of the Historical Office undoubtedly regretted
the omissions, this historian recalls William Z. Slany, the then editor in chief,
defending the volume and the similarly suspect volume on Iran, 1952-1954 at
professional meetings of historians.4 In any case, persistent lobbying by schol
ars and concerned citizens, the winding down of the Cold War, and perhaps
public disgust with the Iran-Contra machinations of the Reagan administration
combined to force a major change in declassification policies. In 1991, Presi
dent George H.W. Bush reluctantly signed legislation mandating that the FRUS
series be a “thorough, accurate, and reliable documentary record” of U.S.
foreign policy and requiring that other government agencies open their records
to Department of State historians. In the 1990s, the Historical Office gained
access to the CIA records on Guatemala even as the agency was identifying the
intervention in Guatemala as one of eleven covert operations it acknowledged
conducting during the early Cold War.

Under the aegis of the new declassification rules, the Historical Office is
“convinced” that it gained access to all relevant CIA documents. Only two
documents were withheld in full from publication, and nine documents have a
paragraph or more excised. Most documents have excisions of names and places
(pp. v-vii). The editors included handy lists of abbreviations and cryptonyms
and persons and pseudonyms. Not all identities of pseudonyms were released.

2. Blanche Wiesen Cooke, “U.S. Foreign Relations History—Is There a Future at All,”
Perspectives: American Historical Association Newsletter 29 (November 1991): 11-14.

3. Bryce Wood, The Dismantling of the Good Neighbor Policy (Austin, TX, 1985), 263-65.
4. FRUS, /952-J954, vol. 10: Iran (Washington, DC, 1989).

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The U.S. Intervention in Guatemala: The Documentary Record : 787

CIA officers apparently preferred pompous, silly-sounding names tor their
covers. Richard M. Bissell, deputy director of the CIA, went by “Pinckney E.
Lynade.” “Walter C. Twicker” was E. Howard Hunt of Watergate notoriety
inn. xix-xxi).

Although a wealth of new detail can be found in the Guatemala volume, the
documents will probably not substantially change the basic scholarly interpre
tations of the CIA’s role in Guatemala. For more than two decades, scholars

have been skillfully dissecting the covert operation. In 1982, journalists Stephen
Schlesinger and Stephen Kinzer and historian Richard H. Immerman respec
tively published remarkable studies of the U.S. war against President Arbenz.
Both Bitter Fruit and The CIA in Guatemala drew on State and Defense Depart
ment and FBI records obtained under the Freedom of Information Act and

on memoirs and on interviews with U.S. and Guatemalan officials. The two

studies differed slightly in their analysis of U.S. motivations. Immerman noted
that, within the prevailing Cold War ethos, U.S. officials believed that by
understanding the nature of communism they could identify Communists.
Guatemalan radicals reminded U.S. officials of Communists that they had
encountered in Europe and Asia. After his first conversation with Arbenz,
Ambassador Peurifoy reported that “if the president is not a Communist, he
will certainly do until one comes along.”5 In contrast, Schlesinger and Kinzer
emphasized economic imperatives to explain the U.S. hostility to the
Guatemalan revolution. Through Decree 900 (1952), Arbenz expropriated the
landholdings of the United Fruit Company of Boston. Numerous Eisenhower
administration officials, including CIA Director Dulles and Secretary of State
John Foster Dulles, had once worked for United Fruit.6 To emphasize either
strategic or economic motives in analyzing U.S. policies toward Guatemala is
perhaps to draw distinctions without differences. Guatemalan leaders seemingly
violated both the national security decisions and foreign economic policies of
the United States. The Eisenhower administration encapsulated those concerns
when it began a comprehensive assessment of Guatemala with the telling ob
servation that “the current political situation in Guatemala is adverse to US
interests.”7 Nonetheless, the new documents lend credence to Immerman’s con

clusions. As one CIA official noted, agrarian reform made “land available to
Guatemalans in the Communist pattern” (p. 20). The State Department’s Office
of Intelligence Research added that agrarian reform furnished “a basis for the
strengthening of political and Communist control over the rural population”
(pp. 70-71).

5- Peurifoy to State Department, 17 December 1953, FRUS, 7952-7954, 4:1095-97. See
also Richard H. Immerman, The CIA in Guatemala: The Foreign Policy of Intervention (Austin,
TX, 1982), 101-5.

6. Stephen Schlesinger and Stephen Kinzer, Bitter Fruit: The Untold Story of the American
Coup in Guatemala (New York, 1982), 106-7.

7. National Intelligence Estimate, “Probable Developments in Guatemala,” 19 May 1953,
FRUS, 1952-1974, 4:1061. See also Stephen G. Rabe, Eisenhower and Latin America: The
Foreign Policy of Anticommunism (Chapel Hill, NC, 1988), 57-59.

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: DIPLOMATIC HISTORY

Impressive analyses of the U.S. role in Guatemala followed the work of
Schlesinger and Kinzer and Immerman. In Shattered Hope, Piero Gleijeses, who
is a researcher of amazing energy and dedication, went to Guatemala and inter
viewed President Arbenz’s enemies and supporters, including Maria Villanova
de Arbenz, the president’s widow. Gleijeses discovered that Arbenz relied on
Guatemala’s small Communist party and that he was comfortable with Marxist
ideology. Gleijeses rejected, however, U.S. allegations that Arbenz or the
Guatemalan Communist Party had ties to the Soviet Union. Gleijeses also
asserted that Decree 900 represented the most successful agrarian reform in
Latin America’s history.8 In Revolution in the Countryside, Jim Handy found that

the transfer of land to perhaps one hundred thousand peasant families posed a
challenge to the traditional patterns of rural life. The new landowners, includ
ing the historically oppressed Mayan Indians, felt empowered and demanded
control over their lives. Wealthy Guatemalans, military officers, and prelates of
the Catholic Church reacted with fear and loathing to the idea of the dark
skinned, rural poor exercising power.9 The work of Gleijeses and Handy under
scored the need for scholars to put the CIA intervention within the context of
Guatemala’s tumultuous political, social, and racial milieu. It also demonstrated
that the CIA could identify Guatemalans who would, for their own purposes,
join the U.S. conspiracy against President Arbenz.

in 1999, in nis concise secret ntstory, iMCk 1 .unatner, wno worKea in 1992-93

for the history staff of the CIA before moving to Indiana University, enriched
scholarly understanding of the covert intervention. While at the CIA, Cullather
won an assignment to write a history of the intervention. The CIA presumably
intended to use Cullather’s study for training purposes. The CIA subsequently
agreed to release Cullather’s study and fourteen hundred pages of supporting
documents. This represented only a fraction of the records on Guatemala, for
Cullather located over 260 boxes containing over 180,000 pages. Some of these
documents now appear in this FRUS volume. Cullather decided to limit his
study to asking how the CIA defined “success” in PBSUCCESS. The opera
tion went into CIA lore as an unblemished triumph. But Cullather found that
PBSUCCESS was plagued by shortcomings in intelligence and logistics and the
“hopeless weakness” of Castillo Armas’s troops. CIA analysts and operatives
lacked hard evidence to conclude that President Arbenz resigned because he
“lost his nerve” over the show of air power. Guatemalan military officers, who
could have readily crushed Castillo Armas, forced Arbenz from power for both
international and domestic reasons. They feared that President Eisenhower
might send U.S. marines, and they perhaps opposed the pace and direction of
change in the Guatemalan countryside.10

8. Piero Gleijeses, Shattered Hope: The Guatemalan Revolution and the United States,
1944-7954 (Princeton, NJ, 1991), 3-7, 361-87.

9. Jim Handy, Revolution in the Countryside: Rural Conflict and Agrarian Reform in Guatemala,
7944-7954 (Chapel Hill, NC, 1994), 202-7.

10. Nick Cullather, Secret History: The CIA’s Classified Account of Its Operations in Guatemala,
7952-7954 (Stanford, CA, 1999), vii-xv, 97-110.

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The U.S. Intervention in Guatemala: The Documentary Record : 789

Although scholars have a fair understanding of the CIA intervention, the new
documents point to areas for thought, speculation, and wonder. After Arbenz’s
resignation, the CIA vowed to “collect for later study and exploitation the mass
of documentation which undoubtedly exists in Guatemala attesting to activities
and workings [of] international communism” (p. 408). In Operation PBHIS
TORY, the CIA ultimately gathered about 150,000 documents but could find
no link between Guatemalan radicals and international Communists. The

imbroglio over Iraq’s “weapons of mass destruction” was not the first time that
the CIA had trouble finding evidence to sustain ideological convictions. Prior
to June 1954, the best the CIA could offer was that Guatemalan radicals
attended international meetings organized by international Communists (pp.
65-66, 242). In fact, the CIA apparently felt obligated to manufacture evidence
to prove a link. In “Operation WASHTUB,” the agency planted Soviet arms
on the coast of Nicaragua (p. 280). It also spread rumors of Soviet commissars
landing in Guatemala and planted stories in Time magazine to discredit the
reporting of correspondent Sydney Gruson of the New York Times (pp. 327-29).
The CIA’s “disinformation” specialists became especially creative under stress.

When, in January 1954, the Arbenz government exposed key elements of
PBSUCCESS, the headquarters of the operation, which was based in Florida,
recommended responding by fabricating a “big human interest story, like flying
saucers, birth of sextuplets in remote area to take play away” (p. 178). Begin
ning in 1952, the CIA also compiled lists of Guatemalans meriting “elimina
tion,” “disposal,” or “assassination.” On 1 June 1954, an unnamed CIA officer
lamented that the disposal list had not been kept “up-to-date.” Displaying lit
erary flair, the officer noted that “no real analysis has been made to date to
determine who is ‘to be and not to be'” (p. 302).

The CIA intervention in Guatemala marked a critical moment both in the

history of Guatemala and of inter-American relations. The destruction of the
Arbenz government triggered a ghastly, four-decade-long cycle of terror and
repression that led to the death of perhaps two hundred thousand Guatemalans.
Many Guatemalans were murdered at the hands of right-wing “death squads.”
In 1999, President Bill Clinton publicly apologized to the people of Guatemala
for the U.S. intervention and subsequent support for Guatemala’s murderous
military and intelligence units. Historians now have the challenge of building
on the past scholarship and writing a comprehensive history of the U.S. role in
Guatemala during the Cold War that gives proper attention to the dynamics of
Guatemala’s political and social culture.11 The intervention in Guatemala also
bears study because it became a model for the Bay of Pigs invasion (1961) and
set a precedent for covert interventions in British Guiana (1961-1963), Brazil

11. Stephen M. Streeter has begun this process with his excellent Managing the Counter
revolutioni: The United States and Guatemala, içgg-igôi (Athens, OH, 2000). A conference on
the consequences of CIA interventions in Iran and Guatemala took place in November 2003
at Northeastern Illinois University in Chicago. For an account of the conference see Stephen
Kinzer, “Revisiting Cold War Coups and Finding Them Costly,” New York Times, 30 Novem
ber 2003, 4:3.

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790 : DIPLOMATIC HISTORY

(1962-1964), and Chile (1970-1973). Scholars wanting to analyze the planning
for the invasion of Cuba or the destabilization tactics used against Cheddi Jagan,
Joäo Goulart, and Salvador Allende would be well served by examining the
documents in this volume on Guatemala. Tactics developed in Guatemala—
psychological warfare and “controlled penetrations” of the military, labor
unions, religious organizations, student groups, and media outlets—would be
employed throughout the Western Hemisphere during the Cold War (pp.
113-14).

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Contents

p. 785
p. 786
p. 787
p. 788
p. 789
p. 790

Issue Table of Contents

Diplomatic History, Vol. 28, No. 5 (November 2004) pp. 611-820
Front Matter
CONTRIBUTORS
Note from the Editor [pp. 611-611]
Walter LaFeber: The Making of a Wisconsin School Revisionist [pp. 612-624]
Walter LaFeber: Scholar, Teacher, Intellectual [pp. 625-635]
For Love of the Game: Baseball in Early U.S.-Japanese Encounters and the Rise of a Transnational Sporting Fraternity [pp. 637-662]
Mission Impossible: The CIA and the Cult of Covert Action in the Middle East [pp. 663-701]
New Empire into Old: Making Mexican Newsreels the Cold War Way [pp. 703-748]
“Like Animals or Worse”: Narratives of Culture and Emotion by U.S. and British POWs and Airmen behind Soviet Lines, 1944–1945 [pp. 749-780]
FEATURE REVIEWS
Sexual Politics and the Vietnam Quagmire [pp. 781-784]
The U.S. Intervention in Guatemala: The Documentary Record [pp. 785-790]
Packaging Capital in Venezuela [pp. 791-794]
Imperial Improvement [pp. 795-798]
The Old Cold War [pp. 799-804]
Murder by Index Card: William Colby and the American Tradition of Atrocity Denial [pp. 805-808]
Cold War Geography [pp. 809-811]
INDEX TO VOLUME 28, 2004 [pp. 813-819]
Back Matter

U.S. Strategy for Engagement in

Central

America: Policy Issues for Congress

Updated

November 12,

2019

Congressional Research Service

https://crsreports.congress.gov

R44812

Congressional Research Service

SUMMARY

U.S. Strategy for Engagement in Central
America: Policy Issues for Congress
Central America has received renewed attention from U.S. policymakers over the past

few years as the region has remained a major transit corridor for illicit drugs and has

surpassed Mexico as the largest source of irregular migration to the United States. These

narcotics and migrant flows are the latest symptoms of deep-rooted challenges in several

countries in the region, including widespread insecurity, fragile political and judicial

systems, and high levels of poverty and unemployment. The U.S. government has worked more closely with

partners in Central America to address those challenges since 2014, making some tentative progress. The region is

now at serious risk of backsliding, however, as the Trump Administration has begun to withdraw U.S. diplomatic

pressure and foreign aid while some Central American officials have begun to undermine anti-corruption

campaigns and other structural reforms.

U.S. Strategy for Engagement in Central America

The Obama Administration determined it was in the national security interests of the United States to work with Central

American governments to improve conditions in the region. With congressional support, it launched a new U.S. Strategy for

Engagement in Central America and significantly increased aid to the region. The strategy took a more comprehensive

approach than previous U.S. initiatives in Central America, based on the premise that efforts to promote prosperity, improve

security, and strengthen governance are mutually reinforcing and of equal importance. The strategy focused primarily on the

“Northern Triangle” countries of Central America (El Salvador, Guatemala, and Honduras), which face the greatest

challenges, but it also provided a framework for U.S. engagement with Belize, Costa Rica, Nicaragua, and Panama.

Although the Trump Administration initially maintained the U.S. Strategy for Engagement in Central America, it has

suspended most aid for the Northern Triangle since March 2019 due to the continued northward flow of migrants and

asylum-seekers from the region. The Administration has withheld some assistance appropriated for the Northern Triangle in

FY2017, reprogrammed nearly all assistance appropriated for the Northern Triangle in FY2018, and has yet to disburse most

of the assistance appropriated for the Northern Triangle in FY2019. This aid suspension has forced U.S. agencies to begin

closing down projects and canceling planned activities. The Trump Administration’s FY2020 budget proposal—released

prior to the aid suspension—requested $445 million for Central America, including at least $180 million for the Northern

Triangle.

Congressional Action
Congress has taken an active role in shaping U.S. policy toward Central America. It has appropriated nearly $2.6 billion for

the region over the past four years, including $527.6 million in the Consolidated Appropriations Act, 2019 (P.L. 116-6).

Congress also has placed strict conditions on the aid, requiring the Northern Triangle governments to address a range of

concerns—including border security, corruption, and human rights—to receive assistance.

The 116th Congress could play a crucial role in determining the direction of U.S. policy in the region as it responds to the

Administration’s aid suspension. Two authorization bills, H.R. 2615 and S. 1445, would authorize $577 million and $1.5

billion of assistance, respectively, for certain activities in Central America in FY2020. S. 1445 also would prohibit the

Administration from reprograming any assistance appropriated for the Northern Triangle nations since FY2016. A

consolidated appropriations bill, H.R. 2740 (H.Rept. 116-78), passed by the House in June 2019, would appropriate $540.9

million for Central America in FY2020. The FY2020 State, Foreign Operations, and Related Programs Appropriations Act,

S. 2583 (S.Rept. 116-126), introduced in September 2019, would provide “not less than” $515 million for Central America in

FY2020. Both appropriations bills also would strengthen the funding directives for aid appropriated for Central America in

FY2019. Since Congress has yet to enact either measure, a continuing resolution (P.L. 116-59) is currently funding foreign

assistance programs at the

FY2019 level until November 21,

2019.

R44812

November 12, 2019

Peter J. Meyer

Specialist in Latin
American Affairs

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service

Contents

Introduction ……………………………………………………………………………………………………………………. 1

U.S. Strategy for Engagement in Central America ……………………………………………………………….. 3

Background and Formulation ………………………………………………………………………………………. 3
Three Lines of Action …………………………………………………………………………………………………. 6

Promoting Prosperity and Regional Integration ………………………………………………………… 6
Strengthening Governance …………………………………………………………………………………….. 8
Improving Security …………………………………………………………………………………………….. 10

Congressional Funding ……………………………………………………………………………………………… 12
Conditions on Assistance ………………………………………………………………………………………….. 14
Relationship to the Alliance for Prosperity ………………………………………………………………….. 16
Preliminary Results ………………………………………………………………………………………………….. 18

Policy Issues for Congress………………………………………………………………………………………………. 19

Suspension of U.S. Assistance to the Northern Triangle ………………………………………………… 20
Political Will in Central America ……………………………………………………………………………….. 23
Aid Conditionality ……………………………………………………………………………………………………. 25
Implications of Other U.S. Policy Changes …………………………………………………………………. 27

Immigration ………………………………………………………………………………………………………. 27
Trade ………………………………………………………………………………………………………………… 29
Drug Control ……………………………………………………………………………………………………… 30

Outlook ………………………………………………………………………………………………………………………… 31

Figures

Figure 1. U.S. Apprehensions of Northern Triangle Nationals at the Southwest Border:

FY2012-FY2019 ………………………………………………………………………………………………………….. 1

Figure 2. Map of Central America ……………………………………………………………………………………… 3

Figure 3. Central America Strategy Objectives and Lines of Action ………………………………………. 6

Figure 4. Funding for the U.S. Strategy for Engagement in Central America by Foreign

Assistance Account: FY2016-FY2019 …………………………………………………………………………… 14

Figure 5. U.S. Assistance to Central America: FY1946-FY2017 ………………………………………….. 24

Figure 6. Remittances to Central America: 2018 ……………………………………………………………….. 28

Figure 7. Central American Exports to the United States: 2018……………………………………………. 29

Tables

Table 1. Central America Background Information ……………………………………………………………… 4

Table 2. Central America Socioeconomic Indicators ……………………………………………………………. 7

Table 3. Central America Democracy and Governance Indicators ………………………………………….. 9

Table 4. Central America Security Indicators ……………………………………………………………………… 11

Table 5. Funding for the U.S. Strategy for Engagement in Central America by Country:

FY2016-FY2020 ………………………………………………………………………………………………………… 13

Table 6. Alliance for Prosperity Funding by Country: 2016-2019 ………………………………………… 17

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service

Table A-1. FY2016 Funding for the U.S. Strategy for Engagement in Central America ………….. 33

Table A-2. FY2017 Funding for the U.S. Strategy for Engagement in Central America ………….. 34

Table A-3. FY2018 Funding for the U.S. Strategy for Engagement in Central America ………….. 35

Table A-4. FY2019 Funding for the U.S. Strategy for Engagement in Central America ………….. 36

Table A-5. FY2020 Funding for the U.S. Strategy for Engagement in Central America ………….. 36

Appendixes

Appendix. Appropriations for the U.S. Strategy for Engagement in Central America by

Country and Foreign Assistance Account: FY2016-FY2020 …………………………………………….. 33

Contacts

Author Information ………………………………………………………………………………………………………… 37

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service 1

Introduction
Instability in Central America—particularly the “Northern Triangle” nations of El Salvador,

Guatemala, and Honduras—is one of the most pressing challenges for U.S. policy in the Western

Hemisphere. These countries are struggling with widespread insecurity, fragile political and

judicial systems, and high levels of poverty and unemployment. The inability of the Northern

Triangle governments to address those challenges effectively has had far-reaching implications

for the United States. Transnational criminal organizations have taken advantage of the situation,

utilizing the region to traffic approximately 90% of cocaine destined for the United States, among

other illicit activities.
1
The region has also become a significant source of mixed migration flows

of asylum-seekers and economic migrants to the United States.
2
In FY2019, U.S. authorities

apprehended nearly 608,000 unauthorized migrants from the Northern Triangle at the southwest

border; 81% of those apprehended were families or unaccompanied minors, many of whom were

seeking asylum (see Figure 1).

Figure 1. U.S. Apprehensions of Northern Triangle Nationals at the Southwest

Border: FY2012-

FY2019

Sources: CRS presentation of data from U.S. Customs and Border Protection, “U.S. Border Patrol Nationwide

Apprehensions by Citizenship and Sector in FY2007-FY2018;” and “U.S. Border Patrol Southwest Border

Apprehensions by Sector Fiscal Year 2019,” press release, October 29, 2019.

Notes: Unaccompanied children = children under 18 years old without a parent or legal guardian at the time of

apprehension. Family units = total number of individuals (children under 18 years old, parents, or legal guardians)

apprehended with a family member.

1 U.S. Department of State, Bureau of International Narcotics and Law Enforcement Affairs, 2017 International

Narcotics Control Strategy Report, Volume I: Drug and Chemical Control, March 2017. The State Department did not

include updated estimates in its 2018 or 2019 reports.

2 For more information, see CRS In Focus IF11151, Central American Migration: Root Causes and U.S. Policy, by

Peter J. Meyer and Maureen Taft-Morales.

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service 2

The Obama Administration determined that it was “in the national security interests of the United

States”

to work with Central American governments to improve security, strengthen governance,

and promote economic prosperity in the region.
3
Accordingly, the Obama Administration

launched a new, whole-of-government U.S. Strategy for Engagement in Central America and

requested significant increases in foreign assistance to implement the strategy, primarily through

the State Department and U.S. Agency for International Development (USAID). Congress has

appropriated nearly $2.6 billion in aid for the region since FY2016 but has required the Northern

Triangle governments to address a series of concerns prior to receiving U.S. support.

The Trump Administration initially maintained the U.S. Strategy for Engagement in Central

America while adjusting the initiative to place more emphasis on preventing illegal immigration,

combating transnational crime, and generating export and investment opportunities for U.S.

businesses.
4
The Administration also sought to scale back U.S. assistance to Central America.

Congress has rejected some of the Administration’s proposed reductions, but annual

appropriations for the region have declined by nearly 30% since FY2016 (see Table 5, below).

The future of the Central America strategy is now in question, however, as the Trump

Administration has suspended most U.S. foreign assistance programs in El Salvador, Guatemala,

and Honduras since March 2019. The suspension came after more than a year of threats from

President Trump to cut off assistance to the Northern Triangle due to the continued northward

flow of migrants and asylum-seekers from the region. Some Members of Congress have objected

to the Administration’s policy shift and have introduced legislation that would restrict the

Administration’s ability to transfer funds away from the region. The decisions made by the 116
th

Congress could play a crucial role in determining the direction of U.S. policy toward Central

America in the coming years.

This report examines the U.S. Strategy for Engagement in Central America, including its

formulation, objectives, funding, and relationship to the Alliance for Prosperity initiative put

forward by the Northern Triangle governments. The report also analyzes the preliminary results

of the strategy and several policy issues that the 116
th
Congress may assess as it considers the

future of U.S. policy in Central America. These issues include the potential effects of suspending

U.S. assistance to the Northern Triangle; the extent to which Central American governments are

addressing their domestic challenges; the utility of conditions placed on assistance; and how

changes in U.S. immigration, trade, and drug control policies could affect the

region.

3 White House, U.S. Strategy for Engagement in Central America, March 16, 2015, at

https://obamawhitehouse.archives.gov/sites/default/files/docs/central_america_strategy .

4 U.S. Department of State, Report to Update the U.S. Strategy for Engagement in Central America, August 8, 2017, at

https://pdf.usaid.gov/pdf_docs/PA00N7FB .

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service 3

Figure 2. Map of Central America

Source: Congressional Research Service (CRS) Graphics.

Note: The “Northern Triangle” countries (El Salvador, Guatemala, and Honduras) are pictured in orange.

U.S. Strategy for Engagement in Central America

Background and Formulation

Central America is a diverse region that includes the Northern Triangle nations of El Salvador,

Guatemala, and Honduras, which are facing acute economic, governance, and security

challenges; the former British colony of Belize, which is stable politically but faces a difficult

economic and security situation; Nicaragua, which has comparatively low levels of crime but a de

facto single-party government and high levels of poverty; and Costa Rica and Panama, which

have comparatively prosperous economies and strong institutions but face growing security

challenges (see Table 1).
5
Given the geographic proximity of the region (see Figure 2), the

5 For more information, see CRS Report R43616, El Salvador: Background and U.S. Relations; CRS Report R42580,

Guatemala: Political and Socioeconomic Conditions and U.S. Relations; CRS Report RL34027, Honduras:

Background and U.S. Relations; CRS In Focus IF10908, Costa Rica: An Overview; and CRS In Focus IF10430,

Panama: An Overview.

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United States has historically maintained close ties to Central America and played a prominent

role in the region’s political and economic development. It has also provided assistance to Central

American nations designed to counter perceived threats to the United States, ranging from Soviet

influence during the Cold War to illicit narcotics and irregular migration today.

Table 1. Central America Background Information

People Geography Economy Leadership

Population

(2018 est.)

Land Area

(sq. km.)

Gross Domestic

Product

(GDP, 2018 est.)

Head of

Government

Belize 0.4 million 22,806 $1.9 billion Prime Minister Dean Barrow

Costa Rica 5.0 million 51,060 $60.5 billion President Carlos Alvarado

El Salvador 6.4 million 20,721 $26.1 billion President Nayib Bukele

Guatemala 16.8 million 107,159 $78.5 billion President Jimmy Morales

Honduras 9.2 million 111,890 $23.8 billion President Juan Orlando

Hernández

Nicaragua 6.3 million 119,990 $13.1 billion President Daniel Ortega

Panama 4.1 million 74,340 $65.1 billion President Laurentino Cortizo

Sources: Population estimates from U.N. Economic Commission for Latin America and the Caribbean

(ECLAC), Statistical Yearbook for Latin America and the Caribbean, 2018, March 2019; land area data from Central

Intelligence Agency, World Factbook, 2019; GDP estimates from International Monetary Fund (IMF), World

Economic Outlook Database October 2019, October 11, 2019.

Note: President-elect Alejandro Giammattei of Guatemala is scheduled to take office on January 14, 2020.

The U.S. Strategy for Engagement in Central America is the latest in a series of U.S. efforts over

the past 20 years designed to produce sustained improvements in living conditions in the region.

During the Administration of President George W. Bush, U.S. policy toward Central America

primarily focused on boosting economic growth through increased trade. The George W. Bush

Administration negotiated the Dominican Republic-Central America-United States Free

Trade

Agreement (CAFTA-DR) and the U.S.-Panama Free Trade Agreement.
6
It also awarded

Honduras, Nicaragua, and El Salvador $851 million of Millennium Challenge Corporation

(MCC) aid intended to improve productivity and connect individuals to markets.
7

U.S. policy toward Central America shifted significantly near the end of the George W. Bush

Administration to address escalating levels of crime and violence in the region. The George W.

Bush Administration launched a security assistance package for Mexico and Central America

known as the Mérida Initiative in FY2008, and the Obama Administration rebranded the Central

America portion of the aid package as the Central America Regional Security Initiative (CARSI)

in FY2010. Congress appropriated nearly $1.2 billion in aid between FY2008 and FY2015

6 For more information, see CRS In Focus IF10394, Dominican Republic-Central America-United States Free Trade

Agreement (CAFTA-DR), by M. Angeles Villarreal.

7 Honduras received a five-year, $215 million compact in June 2005; it was later reduced to $205 million as a result of

a 2009 coup. Nicaragua received a five-year, $175 million compact in July 2005; it was later reduced to $113.5 million

as a result of disputed 2008 municipal elections. El Salvador received a $461 million compact in November 2006; the

Obama Administration awarded the country a second five-year compact, worth $277 million, in September 2013. For

more information on the Millennium Challenge Corporation, see CRS Report RL32427, Millennium Challenge

Corporation: Overview and Issues, by Nick M. Brown.

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provide Central American partners with equipment, training, and technical assistance to improve

narcotics interdiction and disrupt criminal networks; strengthen the capacities of Central

American law enforcement and justice sector institutions; and support community-based crime

and violence prevention efforts in the region.
8

By the beginning of President Obama’s second term, the Administration had concluded that

although the resources provided through MCC, CARSI, and other U.S. initiatives had

“contributed to localized gains and proof-of-concept policy examples,” they had “not yielded

sustained, broad-based improvements” in Central America.
9
As a result, the Obama

Administration had already begun to develop a new strategy for U.S. policy in Central America

when an unexpected surge of unaccompanied minors and families from the Northern Triangle

began to arrive at the U.S. border in 2014. The new strategy was approved by the National

Security Council in August 2014 and became technically binding on all U.S. agencies in

September 2014.
10

Congress directed the Trump Administration to review and revise the strategy,

but the updated version, released in August 2017, maintains the objectives and sub-objectives that

the Obama Administration approved in 2014.
11

The U.S. Strategy for Engagement in Central America is intended to take a broader, more

comprehensive approach than previous U.S. initiatives in the region. Its stated objective is “the

evolution of an economically integrated Central America that is fully democratic; provides

economic opportunities to its people; enjoys more accountable, transparent, and effective

institutions; and ensures a safe environment for its citizens.”
12

Whereas other U.S. efforts over the

past 20 years generally emphasized a single objective, such as economic growth or crime

reduction, the current strategy is based on the premise that prosperity, security, and governance

are “mutually reinforcing and of equal importance.”
13

The current strategy also prioritizes interagency coordination more than previous initiatives.

Many analysts criticized CARSI as a collection of “stove-piped” programs, with each U.S.

agency implementing its own activities and pursuing its own objectives, which sometimes

conflicted with those of other agencies, international donors, or regional partners.
14

The U.S.

Strategy for Engagement is a whole-of-government effort that provides an overarching

framework for all U.S. government interactions in Central America. While U.S. agencies continue

to carry out a wide range of programs, the strategy is intended to ensure their efforts—and the

messages they deliver to partners in the region—are coordinated. The strategy also seeks to

combine U.S. resources with those of other donors and ensure that Central American

governments are committed to carrying out complementary reforms.

8 For background information on the Central America Regional Security Initiative (CARSI), see CRS Report R41731,

Central America Regional Security Initiative: Background and Policy Issues for Congress, by Peter J. Meyer and Clare

Ribando Seelke.

9 White House, U.S. Strategy for Engagement in Central America, March 16, 2015.

10 CRS interview with State Department official, October 2016.

11 U.S. Department of State, Report to Update the U.S. Strategy for Engagement in Central America, August 8, 2017.

12 Ibid.

13 White House, U.S. Strategy for Engagement in Central America, March 16, 2015.

14 See, for example, Eric L. Olson et al., Crime and Violence in Central America’s Northern Triangle: How U.S. Policy

Responses Are Helping, Hurting, and Can Be Improved, Woodrow Wilson International Center for Scholars, Reports

on the Americas #34, December 2014.

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Three Lines of Action

To achieve its objectives, the U.S. Strategy for Engagement in Central America supports activities

grouped under three overarching lines of action:

1. promoting prosperity and regional integration,

2. strengthening governance,

and

3. improving security (see Figure 3).

Figure 3. Central America Strategy Objectives and Lines of Action

Source: U.S. Department of State, “U.S. Strategy for Engagement in Central America—Results Architecture,”

September 7, 2016. Adapted by CRS Graphics.

Promoting Prosperity and Regional Integration

With the exceptions of Costa Rica and Panama, the countries of Central America are among the

poorest in the Western Hemisphere. Land ownership and economic power have historically been

concentrated in the hands of a small group of elites, leaving behind a legacy of extreme inequality

that has been exacerbated by gender discrimination and the social exclusion of ethnic minorities.

Although the adoption of market-oriented economic policies in the 1980s and 1990s produced

greater macroeconomic stability and facilitated the diversification of Central America’s once

predominantly agricultural economies, the economic gains have not translated into improved

living conditions for many of the region’s residents. Central America is the midst of a

demographic shift in which the working age population, as a proportion of the total population,

has grown significantly and is expected to continue growing in the coming decades. Although this

presents a window of opportunity to boost economic growth, the region is failing to generate

sufficient employment to absorb the growing labor supply (see Table 2).

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Table 2. Central America Socioeconomic Indicators

Per Capita

Income

Poverty Economic

Growth Rate

Youth

Disconnection

GDP per Capita

(2018 est.)

% of Population

Living in Poverty

(2017 est.)a

Annual % Growth

in GDP

(2018 est.)

% of Youth Aged

15-24 not in

Employment,

Education, or

Training (2018

est.)

Belize $4,862 Not available 3.0 27.3

Costa Rica $12,039 15.1 2.6 19.4

El Salvador $3,922 37.8 2.5 27.2

Guatemala $4,545 50.5a 3.1 26.6

Honduras $2,524 53.2a 3.7 27.8

Nicaragua $2,031 46.3a -3.8 13.2

Panama $15,643 16.7 3.7 16.0

Sources: Per capita income and economic growth data from the IMF, World Economic Outlook Database October

2019, October 11, 2019; poverty data from ECLAC, CEPALSTAT Database, accessed November 2019; youth

disconnection data from the International Labour Organization (ILO), ILOSTAT,

accessed November 2019.

a. ECLAC considers a household below the poverty line if it is unable to satisfy the basic needs of its
members. Data from 2016 for Honduras and 2014 for Guatemala and Nicaragua.

The U.S. Strategy for Engagement in Central America seeks to address these challenges through a

variety of actions designed to promote prosperity and regional integration. The strategy aims to

facilitate increased trade by helping the region take advantage of the opportunities provided by

CAFTA-DR and other trade agreements. For example, USAID has sought to strengthen the

capacities of regional organizations, including the Central America Integration System,
15

analyze, formulate, and implement regional trade policies.
16

Likewise, the Department of

Commerce has provided training and technical assistance intended to improve customs and

border management and facilitate trade.
17

The strategy also seeks to diversify and connect electric grids in Central America to bring down

the region’s high electricity costs, which are a drag on economic growth. For example, the State

Department’s Bureau of Energy Resources has sought to strengthen the Central American power

market and regional transmission system and enhance sustainable energy financing mechanisms

to increase energy trade and attract investment in energy infrastructure.
18

Similarly, USAID has

worked with regional governments to develop uniform procurement processes and transmission

rights as well as regulations to facilitate investment in renewable power generation projects.
19

15 The Central American Integration System is an international organization created in 1991 by the nations of Central

America to foster regional integration. Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and

the Dominican Republic are member states of the organization.

16 USAID, “Program Narrative: Central America Regional,” CN #151, July 20, 2018, pp. 3-4.

17 Department of State, “Congressional Notification 17-058—State Western Hemisphere Regional: Central America

Strategy Interagency Solicitation Process,” April 4, 2017.

18 Ibid.

19 USAID, “Regional Program Narrative: Central America Regional,” CN #14, October 14, 2016, p. 4.

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Other activities carried out under the Central America strategy aim to reduce poverty in the region

and to help those living below the poverty line meet their basic needs. In Honduras, for example,

USAID has supported a multifaceted food security program designed to reduce extreme poverty

and chronic malnutrition by helping subsistence farmers diversify their crops and increase

household incomes. The program introduced farmers to new crops, technologies, and sanitary

processes intended to increase agricultural productivity, improve farming practices and natural

resource management, and boost exports.
20

Facilitating access to quality education is another way in which the strategy seeks to promote

prosperity in Central America. For example, USAID has funded basic education programs in

Nicaragua, including efforts to improve teacher training and student reading performance.
21

In El

Salvador, USAID has sought to develop partnerships between academia and the private sector

and to better link tertiary education with labor-market needs. Among other activities, USAID has

supported career centers, internship programs, and academic programs in key economic sectors.
22

Finally, the Central America strategy seeks to build resiliency to external shocks, such as the

drought and coffee fungus outbreak that have devastated rural communities in recent years. For

instance, USAID has worked with communities in the Western Highlands of Guatemala to reduce

the region’s vulnerability to climate change. USAID has supported efforts to increase access to

climate information to inform community decisions, strengthen government capacity to address

climate risks, and disseminate agricultural practices that are resilient to climate impacts.
23

Strengthening Governance

A legacy of conflict and authoritarian rule has inhibited the development of strong democratic

institutions in most of Central America. The countries of the region, with the exception of Costa

Rica and Belize, did not establish their current civilian democratic regimes until the 1980s and

1990s, after decades of political repression and protracted civil conflicts.
24

Although every

Central American country now holds regular elections, several have been controversial, and other

elements of democracy, such as the separation of powers, remain only partially institutionalized.

Moreover, failures to reform and dedicate sufficient resources to the public sector have left many

Central American governments weak and susceptible to corruption. As governments in the region

have become embroiled in scandals and have struggled to address citizens’ concerns effectively,

popular support for democracy has declined (see Table 3).

The U.S. Strategy for Engagement in Central America seeks to strengthen governance in the

region in a variety of ways. It calls for the professionalization of Central American civil services

to improve the technical competence of government employees, depoliticize government

institutions, and ensure continuity across administrations. In El Salvador, for example, USAID

has supported civil society efforts to advocate for civil service reforms and the implementation of

merit-based systems.
25

20 USAID, “Country Narrative: Honduras,” CN #97, April 10, 2018, pp. 5-6.

21 USAID, “Country Narrative: Nicaragua,” April 10, 2018, pp. 2-3.

22 USAID, “Country Narrative: El Salvador,” CN #96, April 10, 2018, pp. 5-6.

23 USAID, “USAID/Guatemala Country Fact Sheet,” July 2018, p. 12.

24 Costa Rica has maintained civilian democratic rule since the end of a 1948 civil war. Belize, which obtained its

independence from the United Kingdom in 1981, had a much different historical trajectory than its neighbors.

25 USAID, “Country Narrative: El Salvador,” CN #96, April 10, 2018, p. 3.

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Table 3. Central America Democracy and Governance Indicators

Political Rights

and Civil Liberties

Government

Effectiveness

Public-Sector

Corruption

Satisfaction with

Democracy

Freedom House

Score and

Classification;

0-100, Least Free

to Most Free

(2018)

Percentile Rank

Globally; 0-100,

Least Effective to

Most Effective

(2017)

Perceptions;

0-100, Highly

Corrupt to Very

Clean (2018)

% of Population

Satisfied with

How Democracy

Works in Their

Country

(2018/19)

Belize 86, Free 30 Not available Not available

Costa Rica 91, Free 68 56 46

El Salvador 67, Free 37 35 37

Guatemala 53, Partly Free 24 27 41

Honduras 46, Partly Free 28 29 36

Nicaragua 32, Not Free 19 25 46

Panama 84, Free 52 37 26

Sources: Political rights and civil liberties data from Freedom House, Freedom in the World 2019, February 4,

2019; government effectiveness data from World Bank, Worldwide Governance Indicators, accessed November

2019; corruption data from Transparency International, Corruption Perceptions Index 2018, January 29, 2019;

democracy satisfaction data from Elizabeth J. Zechmeister and Noam Lupu, Pulse of Democracy in the Americas:

Results from the 2019 AmericasBarometer Study, Vanderbilt University, Latin American Public Opinion Project,

October 15, 2019.

The strategy also seeks to improve Central American governments’ capacities to raise revenues

while ensuring public resources are managed responsibly. For example, the Department of the

Treasury has provided technical assistance to Guatemala’s Ministry of Finance intended to

improve treasury management operations and develop an investment policy to ensure financial

resources are used efficiently and transparently.
26

At the same time, USAID has trained

Guatemalan civil society organizations about transparency laws to strengthen the organizations’

capacities to hold the government accountable.
27

Other activities are designed to ensure governments in the region uphold democratic values and

practices, including respect for human rights. For example, USAID has supported independent

media as well as civil society organizations working to promote and defend democracy in

Nicaragua.
28

The State Department’s Bureau of Democracy, Human Rights, and Labor (DRL)

works throughout the region to support human rights defenders and civil society organizations

that face threats and attacks as a result of their work. DRL assistance seeks to help individuals

avoid or mitigate threats, withstand attacks, and continue advocacy efforts domestically and

internationally.
29

26 Department of State, “Congressional Notification 17-084—State Western Hemisphere Regional: Central America

Strategy Interagency Solicitation Process,” May 16, 2017.

27 USAID, “Country Narrative: Guatemala,” CN #152, July 20, 2018, p. 4.

28 “Nicaragua’s Ortega Ejects IACHR Missions,” Latin News Daily, December 20, 2018; and USAID, “Country

Narrative: Nicaragua,” April 10, 2018, pp. 1-2.

29 Department of State, “Congressional Notification 17-058—State Western Hemisphere Regional: Central America

Strategy Interagency Solicitation Process,” April 4, 2017.

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Finally, the U.S. Strategy for Engagement in Central America seeks to improve governance in the

region by advancing justice sector reforms designed to decrease impunity. The State

Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL) has provided

training and technical assistance to prosecutors, judges, and other justice sector actors on issues

such as case management and justice sector administration. INL has also provided specialized

training and equipment designed to strengthen forensic capabilities, internal affairs offices, and

investigative skills in the region. Moreover, INL has partially funded the operations of

international anti-corruption commissions that assist local prosecutors in the investigation and

prosecution of complex corruption cases.
30

Improving Security

Violence has long plagued Central America, and Belize, El Salvador, Guatemala, and Honduras

continue to have some of the highest homicide rates in the world. Common crime is also

widespread. A number of interrelated factors have contributed to the poor security situation,

including high levels of poverty, fragmented families, and a lack of legitimate employment

opportunities, which leave many youth in the region susceptible to recruitment by gangs or other

criminal organizations. In addition, the region serves as an important drug-trafficking corridor

due to its location between cocaine-producing countries in South America and consumers in the

United States. Heavily armed and well-financed transnational criminal organizations have sought

to secure trafficking routes through Central America by battling one another and local affiliates

and seeking to intimidate and infiltrate government institutions. Security forces and other justice

sector institutions in the region generally lack the personnel, equipment, and training necessary to

respond to these threats and have struggled with systemic corruption. As a result, most crimes are

committed with impunity (see Table 4).

The U.S. Strategy for Engagement in Central America aims to improve security in the region in a

number of ways, including through the professionalization of civilian police forces. For example,

INL has engaged in a variety of activities designed to improve the quality and strengthen the

capacity of the Honduran National Police. Among other activities, INL has supported efforts to

vet police officers, improve police academy curricula and training, and enhance police

engagement with civil society.
31

U.S. assistance has also funded regional efforts to employ

intelligence-led policing, such as the expansion of the comparative statistics (COMPSTAT)

model, which allows real-time mapping and analysis of criminal activity.
32

The strategy also expands crime and violence prevention efforts. USAID and INL have adopted a

“place-based” approach that integrates their respective prevention and law enforcement

interventions in the most violent Central American communities. USAID interventions have

included primary prevention programs that work with communities to create safe spaces for

families and young people, secondary prevention programs that identify the youth most at risk of

engaging in violent behavior and provide them and their families with behavior-change

counseling, and tertiary prevention programs that seek to reintegrate juvenile offenders into

30 See, for examples, U.S. Department of State, “Congressional Notification 18-117—State Western Hemisphere

Regional: Central America Regional Security Initiative (CARSI), Honduras,” May 16, 2018; and “Congressional

Notification 18-079—State Western Hemisphere Regional: Central America Regional Security Initiative (CARSI),

Guatemala,” April 23,

2018.

31 U.S. Department of State, “Congressional Notification 18-117—State Western Hemisphere Regional: Central

America Regional Security Initiative (CARSI), Honduras,” May 16, 2018, pp. 4-5.

32 U.S. Department of State, Bureau of International Narcotics and Law Enforcement Affairs, 2018 International

Narcotics Control Strategy Report, Volume I: Drug and Chemical Control, March 2018.

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society.
33

INL has funded primary prevention programs intended to reduce gang affiliation and

increase job prospects for inmates who are eligible for early release. It also has supported the

development of “model police precincts,” which are designed to build local confidence in law

enforcement by converting police forces into community-based, service-oriented organizations.
34

Table 4. Central America Security Indicators

Homicide Rate Crime Victimization Rule of Law

Murders per 100,000

Residents (2018)

% of Population

Reporting They Were

the Victim of a Crime

in the Past Year

(2018/19)
Percentile Rank
Globally; 0-100,

Weakest to Strongest

(2018)

Belize 36 Not available 20

Costa Rica 12 22 69

El Salvador 51 21 20

Guatemala 22 20 13

Honduras 41 19 16

Nicaragua Not available 18 15

Panama 10 22 52

Sources: Homicide rates from Chris Dalby and Camilo Carranza “Insight Crime’s 2018 Homicide Round-Up,”

Insight Crime, January 22, 2019; and Universidad Nacional Autónoma de Honduras, Observatorio de la Violencia,

Boletín Enero a Diciembre 2018, no. 52, March 2019; crime victimization data from Elizabeth J. Zechmeister and

Noam Lupu, Pulse of Democracy in the Americas: Results from the 2019 AmericasBarometer Study, Vanderbilt

University, Latin American Public Opinion Project, October 15, 2019.

Note: The homicide rate is not available for Nicaragua, where government repression led to more than 300

deaths in 2018 according to human rights organizations. In 2017, Nicaragua registered 431 total murders and a

homicide rate of 7 per 100,000.

The U.S. Strategy for Engagement in Central America also continues long-standing U.S.

assistance designed to professionalize regional armed forces. The strategy aims to encourage

Central American militaries to transition out of internal law enforcement roles, strengthen

regional defense cooperation, and enhance respect for human rights and civilian control of the

military.
35

U.S. support for regional militaries also aims to increase their capabilities and

strengthen military-to-military relationships. Central American armed forces personnel have

received training on topics such as intelligence, defense acquisition, and search and rescue

planning at military institutions in the United States.
36

In addition, the strategy seeks to reduce the influence of organized crime and gangs. Some U.S.

assistance is designed to extend the reach of the region’s security forces. For example, the U.S.

government has helped Panama’s national border service deploy tactical mobility vehicles and

33 USAID, “Congressional Notification: Central America Regional Security Initiative (CARSI),” CN #134, June 22,

2018.

34 See, for example, U.S. Department of State, “Congressional Notification 18-101—State Western Hemisphere

Regional: Central America Regional Security Initiative (CARSI), El Salvador,” May 9, 2019, p. 4.

35 U.S. Department of State, Report to Update the U.S. Strategy for Engagement in Central America, August 8, 2017.

36 U.S. Department of State, “Congressional Notification 18-163,” June 26, 2018.

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sustain fixed- and rotary-wing aircraft to protect its maritime and land borders.
37

INL has used

other U.S. assistance to maintain specialized law enforcement units that are vetted by, and work

with, U.S. personnel to investigate and disrupt the operations of transnational gangs and

organized crime networks.
38

Congressional Funding

Congress has appropriated nearly $2.6 billion for efforts under the U.S. Strategy for Engagement

in Central America. This figure includes $750 million in FY2016, $684.8 million in FY2017, an

estimated $614.5 million in FY2018, and an estimated $527.6 million in FY2019 (see Table 5

and the Appendix).
39

The State Department and USAID have allocated the vast majority of the

aid to El Salvador, Guatemala, and Honduras, including at least 76% of the funding appropriated

in FY2016 and FY2017.
40

Some of the aid Congress appropriated will never be delivered to the

region, however, since the Trump Administration reprogramed more than $400 million of

FY2018 assistance for the Northern Triangle to other countries around the world (see

“Suspension of U.S.

Assistance to the Northern Triangle,” below).

Prior to the aid suspension, the Trump Administration requested $445 million to continue

implementing the U.S. Strategy for Engagement in Central America in FY2020. If enacted, aid to

the region would decline by 16% compared to the FY2019 estimate. Nevertheless, assistance

would remain above the pre-strategy average of $376 million between FY2010 and FY2014.
41

The Labor, Health and Human Services, Education, Defense, State, Foreign Operations, and

Energy and Water Development Appropriations Act, 2020 (H.R. 2740, H.Rept. 116-78), passed

by the House in June 2019, would appropriate “not less than” $540.85 million for Central

America. The FY2020 State, Foreign Operations, and Related Programs Appropriations Act, S.

2583 (S.Rept. 116-126), introduced in September 2019, would provide “not less than” $515

million for Central America in FY2020. Since Congress has yet to enact either measure, a

continuing resolution (P.L. 116-59) is currently funding foreign assistance programs at the

FY2019 level until November 21, 2019.

To date, Congress has appropriated all funds for the U.S. Strategy for Engagement in Central

America to the State Department and USAID, with the exception of $2 million appropriated to

the Overseas Private Investment Corporation in FY2016 and two $10 million transfers designated

for the Inter-American Foundation in FY2018 and FY2019. Nevertheless, many other U.S.

agencies are carrying out programs intended to advance the objectives of the strategy using their

own resources and/or funds transferred from the State Department and USAID. The other

agencies involved include the Department of Agriculture, the Department of Commerce, the

Department of Defense, the Department of Homeland Security (DHS), the Department of Justice

(DOJ), the Department of Labor, the Department of the Treasury, the Millennium Challenge

Corporation, and the U.S. Trade and Development Agency.

37 U.S. Department of State, “Congressional Notification 18-295,” September 11, 2018.

38 See, for example, U.S. Department of State, “Congressional Notification 18-101—State Western Hemisphere

Regional: Central America Regional Security Initiative (CARSI), El Salvador,” May 9, 2018.

39 Previous versions of this report included slightly larger appropriations figures due to the inclusion of humanitarian

food assistance (P.L. 480 Title II) for Guatemala.

40 CRS analysis of State Department and USAID Congressional Notifications for FY2016 and FY2017; and U.S.

Department of State, “Estimated FY 2017 and 2018 Levels for Northern Triangle Assistance,” document provided to

Congress, June 2019.

41 U.S. Department of State, Congressional Budget Justifications for Foreign Operations, FY2012-FY2016.

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Table 5. Funding for the U.S. Strategy for Engagement in Central America

by Country: FY2016-

FY2020

(appropriations in millions of current U.S. dollars)

FY2016 FY2017

FY2018

(estimate)a

FY2019

(estimate)b

FY2020

(request)

% Change

2018-2020

Belize 1.2 1.2 1.1 0.0b 0.2 -83%

Costa Rica 1.8 5.7 5.7 8.2c 0.4 -93%

El Salvador 67.9 72.8 57.7a 0.0b 45.7 -21%

Guatemala 127.5 125.5 108.5a 13.0b 69.4 -36%

Honduras 98.3 95.3 79.7a 0.0b 65.8 -18%

Nicaragua 10.0 9.7 10.0 0.0b 6.0 -40%

Panama 3.3 3.3 3.1 0.5b 1.2 -61%

CARSI 348.5 329.2 319.2a 290.0c 250.3 -22%

Other Regional

Assistance

91.4 42.1 29.5a 215.9b 6.0 -80%

Total 750.0 684.8 614.5 527.6 445.0 -28%

Sources: U.S. Department of State, Congressional Budget Justifications for Foreign Operations, FY2018-FY2020,

available at https://www.state.gov/plans-performance-budget/international-

affairs-budgets/; and H.Rept. 116-9.

Notes: CARSI = Central America Regional Security Initiative. “Other Regional Assistance” includes assistance

appropriated or requested for the entire Central American region through funding accounts such as the State

Department’s Western Hemisphere Regional program, USAID’s Central America Regional program, the

Overseas Private Investment Corporation, and the Inter-American Foundation. The State Department does not

consider health assistance provided through USAID’s Central America Regional program to be part of the

strategy.

a. The Trump Administration reprogrammed approximately $400 million of bilateral and regional aid that it
had previously allocated to El Salvador, Guatemala, and Honduras. Revised allocations are not yet available.

b. For FY2019, Congress appropriated most assistance for Central America as regional aid, giving the State
Department flexibility in allocating the resources among the seven nations of the isthmus. Country-by-

country allocations are not yet available.

c. H.Rept. 116-9 stipulates that $32.5 million of CARSI assistance is to be allocated to Costa Rica.

Although many of the activities supported by the Central America strategy are not new, higher

levels of assistance have allowed the U.S. government to significantly scale up programs focused

on prosperity and governance and expand ongoing security efforts. For FY2016-FY2019,

Congress allocated funding for the Central America strategy in the following manner:

 40% was appropriated through the Development Assistance account, which is
designed to foster sustainable, broad-based economic progress and social stability

by supporting long-term projects in areas such as democracy promotion,

economic reform, agriculture, education, and environmental protection.

 33% was appropriated through the International Narcotics Control and Law
Enforcement account, with the funds roughly evenly divided between programs

to support law enforcement and programs designed to strengthen other justice

sector institutions.

 20% was appropriated through the Economic Support Fund account, which funds
USAID crime and violence prevention programs as well as efforts to promote

economic reform and other more traditional development projects.

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 5% was appropriated through the Foreign Military Financing and International
Military Education and Training accounts, which provide equipment and

personnel training to regional militaries (see Figure 4).

Figure 4. Funding for the U.S. Strategy for Engagement in Central America by

Foreign Assistance Account: FY2016-FY2019

Source: CRS presentation of data from U.S. Department of State, Congressional Budget Justifications for

Foreign Operations, FY2018-FY2020, available at https://www.state.gov/plans-performance-budget/international-

affairs-budgets/; and H.Rept. 116-9.

Notes: “Other” includes funding appropriated through the Global Health Programs account (2%); the Overseas

Private Investment Corporation (0.1%); and the Nonproliferation, Antiterrorism, Demining, and Related

programs account (0.1%).

Conditions on Assistance

Congress has placed strict conditions on assistance to El Salvador, Guatemala, and Honduras in

each of the foreign aid appropriations measures enacted since FY2016 in an attempt to bolster

political will in the region and improve the effectiveness of U.S. programs. For example, the

Consolidated Appropriations Act, 2018 (P.L. 115-141) stipulated that 25% of the “assistance for

the central governments of El Salvador, Guatemala, and Honduras” could not be obligated until

the Secretary of State certified that each government was

 informing its citizens of the dangers of the journey to the southwest border of the
United States;

 combating human smuggling and trafficking;

 improving border security, including preventing illegal migration, human
smuggling and trafficking, and trafficking of illicit drugs and other contraband;

and

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 cooperating with U.S. government agencies and other governments in the region
to facilitate the return, repatriation, and reintegration of illegal migrants arriving

at the southwest border of the United States who do not qualify for asylum,

consistent with international law.

The State Department certified that all three countries met those conditions in FY2016, FY2017,

and FY2018, issuing the most recent certifications in August 2018.
42

The act also stipulated that another 50% of the “assistance for the central governments of El

Salvador, Guatemala, and Honduras” could not be obligated until the Secretary of State certified

the each government was

 working cooperatively with an autonomous, publicly accountable entity to
provide oversight of the Plan of the Alliance for Prosperity in the Northern

Triangle in Central America;
43

 combating corruption, including investigating and prosecuting current and former
government officials credibly alleged to be corrupt;

 implementing reforms, policies, and programs to improve transparency and
strengthen public institutions, including increasing the capacity and

independence of the judiciary and the Office of the Attorney General;

 implementing a policy to ensure that local communities, civil society
organizations (including indigenous and other marginalized groups), and local

governments are consulted in the design, and participate in the implementation

and evaluation of, activities of the [Alliance for Prosperity] that affect such

communities, organizations, and governments;

 countering the activities of criminal gangs, drug traffickers, and organized crime;

 investigating and prosecuting in the civilian justice system government
personnel, including military and police personnel, who are credibly alleged to

have violated human rights, and ensuring that such personnel are cooperating in

such cases;

 cooperating with commissions against corruption and impunity and with regional
human rights entities;

 supporting programs to reduce poverty, expand education and vocational training
for at-risk youth, create jobs, and promote equitable economic growth,

particularly in areas contributing to large numbers of migrants;

 implementing a plan that includes goals, benchmarks, and timelines to create a
professional, accountable civilian police force and end the role of the military in

internal policing, and make such plan available to the Department of State;

 protecting the right of political opposition parties, journalists, trade unionists,
human rights defenders, and other civil society activists to operate without

interference;

 increasing government revenues, including by implementing tax reforms and
strengthening customs agencies; and

42 U.S. Department of State, Certification Pursuant to Section 7045(a)(3)(A) of the Department of State, Foreign

Operations, and Related Programs Appropriations Act, 2018 (Div. K, P.L. 115-141), August 11, 2018.

43 The Alliance for Prosperity is a complementary initiative developed by the Northern Triangle governments. For more

information, see “Relationship to the Alliance for Prosperity,” below.

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 resolving commercial disputes, including the confiscation of real property,
between United States entities and such government.

The State Department issued certifications related to those conditions for all three countries in

FY2016 and FY2017. It did not issue certifications for any of the countries for FY2018.

The Consolidated Appropriations Act, 2019 (P.L. 116-6) maintained all 16 of those conditions,

with some slight variations in wording. However, it consolidated the two separate certification

requirements attached to 75% of assistance for the central governments into a single certification

requirement attached to 50% of assistance for the central governments.
44

The State Department

has not issued any certifications for FY2019.

For FY2020, H.R. 2740 (H.Rept. 116-78) would once again tie 50% of aid to the central

governments of El Salvador, Guatemala, and Honduras to the 16 conditions enacted in prior

years. S. 2583 (S.Rept. 116-126), by contrast, would tie 100% of aid to those governments to a

pared-down list of five conditions.

Relationship to the Alliance for Prosperity

Many observers have confused the U.S. Strategy for Engagement in Central America with the

Plan of the Alliance for Prosperity in the Northern Triangle, which was drafted with technical

assistance from the Inter-American Development Bank (IDB) and announced by the Salvadoran,

Guatemalan, and Honduran governments in September 2014. Originally envisioned as a five-

year, $22 billion initiative, the Alliance for Prosperity aims to accelerate structural changes in the

Northern Triangle that would create incentives for people to remain in their own countries. It

includes four primary objectives and strategic actions to achieve them:

1. Stimulate the productive sector, by supporting strategic sectors (such as
textiles, agro-industry, light manufacturing, and tourism); creating special

economic zones to attract new investment; modernizing and expanding

infrastructure; deepening regional trade and energy integration; and supporting

the development of micro, small, and medium enterprises and their integration

into regional production chains.

2. Develop human capital, by improving access to, and the quality of, education
and vocational training; expanding access to health care and adequate nutrition;

expanding social protection systems, including conditional cash transfer

programs for the most vulnerable; and strengthening protection and reintegration

mechanisms for migrants.

3. Improve public safety and access to justice, by investing in violence
prevention programs; ensuring schools are safe spaces; furthering the

professionalization of the police, including through the adoption of community

policing practices; enhancing the capacity of investigators and prosecutors; and

strengthening prison systems.

4. Strengthen institutions and promote transparency, by improving tax
administration and revenue collection; professionalizing human resources;

strengthening government procurement processes; and increasing budget

transparency and access to public information.
45

44 See Section 7045(a)(1) of P.L. 116-6.

45 Governments of El Salvador, Guatemala, and Honduras, Plan of the Alliance for the Prosperity of the Northern

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The Northern Triangle governments collectively allocated approximately $7.2 billion for the

Alliance for Prosperity from 2016 to 2018 (see Table 6). They also budgeted $2.8 billion for the

initiative in 2019, though final allocations may be lower given that planned funding significantly

exceeded actual funding in prior years. The resources allocated to the initiative have included

government revenues as well as loans from the IDB and other international financial institutions.

About 39% of the funds budgeted for the Alliance for Prosperity have been dedicated to

developing human capital, 36% to stimulating the productive sector, 19% to improving public

security and access to justice, and 7% to strengthening institutions and promoting transparency.
46

Some analysts argue that the Alliance for Prosperity should focus more on the region’s most

pressing challenges, such as reducing the size of the informal economy, and that the funds

allocated to the plan could be better targeted toward the communities most in need of support.
47

Table 6. Alliance for Prosperity Funding by Country: 2016-2019

(in millions of U.S. dollars)

2016 2017 2018

2019

(planned) Total

El Salvador 869 562 532 498 2,461

Guatemala 492 646 1,265 1,313 3,716

Honduras 965 910 981 952 3,808

Total 2,326 2,118 2,778 2,763 9,985

Source: “Montos Presupuestados y Ejecutados Alineados al PAPTN,” document provided to CRS by the Inter-

American

Development Bank, June 2019.

Note: 2018 data for Honduras reflects planned funding rather than final allocations.

Although the U.S. Strategy for Engagement in Central America and the Alliance for Prosperity

have broadly similar objectives and fund complementary efforts, they prioritize different

activities. Whereas the U.S. Strategy for Engagement in Central America is designed to advance

U.S. interests in all seven nations of the isthmus, the Alliance for Prosperity represents the

agendas of the three Northern Triangle governments. For example, the U.S. Strategy for

Engagement in Central America devotes significant funding to efforts intended to strengthen the

capacity of civil society groups, which—to date—have played relatively minor roles in the

Alliance for Prosperity. Similarly, the Alliance for Prosperity has partially focused on large-scale

infrastructure projects, which are not funded by the U.S. Strategy for Engagement in Central

America.
48

Triangle: Progress in 2015 and the Plan in 2016, September 2015; and Plan of the Alliance for Prosperity in the

Northern Triangle: A Road Map, September 2014, at http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=

39224238.

46 “Montos Presupuestados y Ejecutados Alineados al PAPTN,” document provided to CRS by the Inter-American

Development Bank, June 2019.

47 See, for example, Manuel Orozco, “One Step Forward for Central America: The Plan for the Alliance for

Prosperity,” Inter-American Dialogue, March 16, 2016.

48 Section 7045(a)(4)(B) of the Consolidated Appropriations Act, 2019 (P.L. 116-6) states, “None of the funds

appropriated by this Act that are made available for assistance for countries in Central America may be made available

for direct government-to-government assistance or for major infrastructure projects.”

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Preliminary Results

Although the U.S. Strategy for Engagement in Central America was adopted more than five years

ago and Congress first appropriated funding for the strategy nearly four years ago, it is too early

to assess the full impact of the initiative. Due to delays in the budget process, certification

requirements, and congressional holds, approximately 80% of the funding for the Central

America strategy that Congress appropriated for FY2016 was obligated (i.e., agencies entered

into contracts or submitted purchase orders for goods or services) from March to September

2017.
49

Consequently, implementation of the strategy has been under way for about 2½ years.

The State Department and USAID selected 39 performance indicators to track progress toward

each sub-objective of the strategy. Some of the metrics measure outputs, such as the number of

civilian police trained by U.S. personnel, and others measure outcomes, such as the percentage of

citizens in the region who trust the police. In FY2018, U.S. agencies reportedly met or exceeded

their targets on 14 indicators while falling short on eight. INL apparently did not establish targets

for the other 17 indicators.
50

The State Department’s most recent monitoring and evaluation

report, issued in May 2019, does not include any targets for FY2019 since the Administration had

suspended foreign assistance programs in the Northern Triangle (see “Suspension of U.S.

Assistance to the Northern Triangle,” below).

Many activities funded by the Central America strategy build upon previous U.S. assistance

efforts that have proven successful. For example, USAID is expanding its community-based

crime and violence prevention programs throughout the region. A three-year impact evaluation,

published in 2014, found that communities where such programs were implemented reported

19% fewer robberies, 51% fewer extortion attempts, and 51% fewer murders than would have

otherwise been expected based on trends in similar communities.
51

USAID is also scaling up rural

development efforts in the Northern Triangle. Since 2011, the agency’s agriculture programs have

reportedly lifted approximately 90,000 Hondurans out of extreme poverty, leading the Honduran

government to invest $56 million to replicate the model.
52

Although country-level indicators measure factors outside the control of the U.S. government, the

State Department and USAID assert that U.S. programs can contribute to nationwide

improvements over the longer term.
53

The most recent statistics available suggest the Northern

Triangle nations, which have received the vast majority of U.S. assistance, have achieved mixed

results in recent years.

49 U.S. Department of State, Report to Update the United States Strategy for Engagement in Central America Plan for

Monitoring and Evaluation, September 7, 2017, at https://www.state.gov/documents/organization/275613 .

50 U.S. Department of State, Progress Report for the United States Strategy for Central America’s Plan for Monitoring

and Evaluation, May 2019, at https://www.state.gov/wp-content/uploads/2019/05/FY-2019-Central-America-Strategy-

Progress-Report . (Hereinafter: U.S. Department of State, May 2019).

51 Susan Berk-Seligson et al., Impact Evaluation of USAID’s Community-Based Crime and Violence Prevention

Approach in Central America: Regional Report for El Salvador, Guatemala, Honduras and Panama, Vanderbilt

University, Latin American Public Opinion Project (LAPOP), October 2014, p. 12. For further discussion of the study’s

findings, see David Rosnick, Alexander Main, and Laura Jung, Have US-Funded CARSI Programs Reduced Crime and

Violence in Central America?, Center for Economic and Policy Research, September 2016; and LAPOP’s Response to

David Rosnick, Alexander Main, and Laura Jung, LAPOP, September 16, 2016.

52 USAID, “Addressing the Drivers of Illegal Immigration: USAID Results in the Northern Triangle,” August 31, 2018,

at https://www.usaid.gov/sites/default/files/documents/1862/USAID_NT_Results_FINAL_08.31.2018 .

53 U.S. Department of State, May 2019.

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 Security conditions have improved in some respects, as homicide rates declined
by 51% in El Salvador, 27% in Guatemala, and 32% in Honduras from 2015 to

2018.
54

Nevertheless, many individuals continue to feel insecure, and the

percentage of individuals reporting they were victims of crime increased in all

three Northern Triangle nations between 2014 and 2018.
55

 Economic growth has remained steady since 2014, averaging 2.3% per year in El
Salvador, 3.5% in Guatemala, and 3.9% in Honduras.

56
However, the stable

macroeconomic situation has not translated into better living conditions for many

residents. The poverty rate has declined by nearly seven percentage points in El

Salvador, but it appears relatively unchanged in Guatemala and Honduras.
57

 Attorneys general in all three Northern Triangle countries, with some
international support, have taken on high-profile corruption cases that have

implicated presidents, cabinet ministers, and legislators. Those efforts to improve

governance could be undermined or even reversed, though, as they face

considerable opposition from political and economic elites in the region.
58

Moreover, Freedom House has documented erosions in political rights and/or

civil liberties in all three Northern Triangle nations since 2014.
59

The Trump Administration argues that the increase in apprehensions of Central American

migrants and asylum-seekers at the U.S. border in FY2019 is evidence that the U.S. Strategy for

Engagement in Central America “has not been effective.”
60

Although Administration officials

acknowledge U.S. foreign aid programs have been “producing the results [they] were intended to

produce,” they maintain, “the only metric that matters is the question of what the migration

situation looks like on the southern border.”
61

There is evidence, however, that some aid programs

also have reduced migration. In Honduras, for example, beneficiaries of a USAID agriculture and

food security program migrated at half the rate of the surrounding community in 2018.
62

Policy Issues for Congress
Congress may examine a number of policy issues as it deliberates on potential changes to the U.S.

Strategy for Engagement in Central America and future appropriations for the initiative. These

54 U.S. Department of State, May 2019, Attachment 3, p. 1; Diálogos, Informe Annual sobre la Violencia Homicida en

Guatemala, Año 2018, April 22, 2019; and Universidad Nacional Autónoma de Honduras, Observatorio de la

Violencia, “Muertos por Homicidio; Enero a Diciembre 2018, Datos Preliminares,” 2019.

55 Elizabeth J. Zechmeister and Noam Lupu, Pulse of Democracy in the Americas: Results from the 2019

AmericasBarometer Study, Vanderbilt University, Latin American Public Opinion Project, October 15, 2019.

56 IMF, World Economic Outlook Database October 2019, October 11, 2019; and ECLAC, CEPALSTAT Database,

accessed November 2019.

57 U.S. Department of State, May 2019, Attachment 3, p. 3.

58 See, for example, Jeff Ernst and Elisabeth Malkin, “In a Corruption Battle in Honduras, the Elites Hit Back,” New

York Times, July 1, 2018; “El Salvador’s Top Cop Pursues Politicians; Now Some Want Him Gone,” Reuters,

December 20, 2018; and Héctor Silva Ávalos and Parker Asmann, “5 Takeaways from CICIG, Guatemala’s Anti-

Corruption Experiment,”

Insight Crime, September 5, 2019.

59 Freedom House, Freedom in the World 2015, January 28, 2015; and Freedom in the World 2019, February 4, 2019.

60 “Senate Foreign Relations Committee Holds Hearing on State Department Fiscal 2020 Budget Request,” CQ

Congressional Transcripts, April 10, 2019.

61 “Senate Foreign Relations Committee Holds Hearing on U.S. Policy in Mexico and Central America,” CQ

Congressional Transcripts,

September 25, 2019.

62 USAID Honduras, “Migration Success Stories at USAID/Honduras,” document

provided to CRS, August 2019.

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issues include the potential effects of suspending U.S. assistance to the Northern Triangle; the

extent to which Central American governments are demonstrating the political will to undertake

domestic reforms; the utility of the conditions placed on assistance to Central America; and how

changes in U.S. immigration, trade, and drug control policies could affect U.S. objectives in the

region.

Suspension of U.S. Assistance to the Northern Triangle

In March 2019, the Trump Administration suspended most U.S. foreign assistance to El Salvador,

Guatemala, and Honduras due to the continued northward flow of migrants and asylum-seekers

from the Northern Triangle. Since then, the State Department has reportedly reprogrammed $404

million (82%) of the $490 million of FY2018 assistance that it had planned to provide to the

Northern Triangle, sending the funds to Venezuela and a variety of other nations.
63

It allocated the

remaining $86 million of FY2018 assistance to previously awarded grants and contracts as well

as DOJ and DHS programs intended to counter transnational crime and improve border security.
64

The State Department also was withholding approximately $164 million (26%) of the $620

million of FY2017 assistance that it previously had obligated for programs in the Northern

Triangle.
65

In October 2019, however, the State Department announced it would resume “targeted

U.S. foreign assistance funding” for El Salvador, Guatemala, and Honduras.
66

That decision

reportedly will release about $143 million of FY2017 aid to carry out joint security efforts,

promote economic growth, strengthen the rule of law and good governance, and help Northern

Triangle governments strengthen their asylum systems.
67

It remains unclear whether the Administration intends to continue withholding assistance

appropriated in FY2019 or revise its FY2020 budget proposal, which requested $445 million for

Central America, including at least $180 million for the Northern Triangle. The Administration

reportedly intends to launch a new economic development plan in 2020, but it has released few

details thus far.
68

The aid suspension has forced USAID and INL to begin closing down projects and canceling

planned activities. In June 2019, for example, USAID implementing partners laid off 140

agricultural technicians that had been assisting 125,000 poor and food insecure Hondurans in the

midst of the drought-affected harvest season.
69

Without additional funding, many more projects in

63 Ibid; “Central America’s ‘Poorest of the Poor’ Hit Hard by U.S. Aid Cuts: Charities,” Reuters, October 3, 2019;

USAID, “Congressional Notification: Venezuela,” CN #157, July 11, 2019; USAID, “Congressional Notification:

USAID/Africa Regional,” CN #206, August 30, 2019; and USAID, “Congressional Notification: South America

Regional,” CN #210, August 30, 2019.

64 Morgan Ortagus, Department Spokesperson, U.S. Department of State, “Department Press Briefing,” June 17, 2019.

65 The $620 million total includes $97 million of non-strategy funds that support activities in the Northern Triangle.

U.S. Department of State, “Estimated FY 2017 and 2018 Levels for Northern Triangle Assistance,” document provided

to Congress, June 2019.

66 Michael R. Pompeo, U.S. Secretary of State, “United States Resumes Targeted U.S. Foreign Assistance for El

Salvador, Guatemala, and Honduras,” press statement, October 16, 2019.

67 Ibid; CRS communication with USAID official, October 2019; and Nick Miroff, “President Trump Says He will

Unfreeze Security Aid to Central American Countries,” Washington Post, October 16, 2019.

68 “EEUU Suspende Plan de Alianza para la Prosperidad y Trabaja en Uno Nuevo,” El Heraldo (Honduras) October 8,

2019; and “Estados Unidos Dejará de Ver al Triángulo Norte como un Bloque,” Diario de Hoy (El Salvador), October

8, 2019.

69 USAID Honduras, “Overview of how Loss of FY’18 Funds has affected USAID/Honduras Activities,” document

provided to CRS, August 2019.

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the Northern Triangle will end prematurely by the end of 2019. Those include a project to

generate economic opportunities for youth in El Salvador, a project to improve urban security

conditions in Guatemala, and a regional project to protect human rights defenders.
70

In Honduras,

the total number of beneficiaries of USAID projects fell from 1.5 million in March 2019 to 1.1

million in September 2019. Without new funding, USAID estimates that the number of

Hondurans receiving some type of USAID support will fall to 700 million by December 2019 and

18,000 by December 2020.
71

The USAID missions in El Salvador and Guatemala would likely

face similar declines.

Since the aid suspension was announced, all three Northern Triangle governments have

demonstrated a willingness to continue working with the United States to reduce irregular

migration. They have signed several cooperation agreements with the Trump Administration,

including agreements that could require some asylum-seekers to apply for protection in the

Northern Triangle rather than in the United States.
72

Acting Secretary of Homeland Security

Kevin McAleenan asserts that the agreements are intended to provide “access to protection to

those who need it, as close to home as possible” while limiting the ability of migrant smugglers

“to profit off false promises and to exploit those individuals seeking to come to our border.”
73

Critics argue that the Northern Triangle countries are not safe for their own citizens, let alone

potential refugees.
74

Although the prospect of losing aid appears to have led the Northern Triangle governments to

bolster their efforts to address U.S. concerns, the Administration’s abrupt policy change could

lead some officials to question the reliability of the United States and begin to seek out other

international partners. The president of the Salvadoran Congress, for example, reportedly

responded to the aid suspension by noting that China was offering to cooperate with the country.
75

An extended suspension of U.S. assistance could provide incentives for the region to further

diversify its foreign and trade relationships.

The aid suspension is unlikely to have a major impact on economies in the region, especially if it

is short-lived. In 2017, U.S. assistance was equivalent to about 0.3% of GDP in Guatemala, 0.5%

of GDP in El Salvador, and 0.8% of GDP in Honduras.
76

Nevertheless, the suspension could have

much larger effects in the marginalized communities where U.S. development efforts are

concentrated. In September 2019, for example, Catholic Relief Services was forced to close a

USAID-funded food security program that had been assisting nearly 30,000 people in

70 Untitled USAID document provided to CRS, September 2019.

71 USAID Honduras, “Migration Briefing,” document provided to CRS, August 2019.

72 Agreement between the Government of the United States of America and the Government of the Republic of

Guatemala on Cooperation Regarding the Examination of Protection Claims, July 26, 2019; Agreement between the

Government of the United States of America and the Government of the Republic of El Salvador for Cooperation in the

Examination of Protection Claims, September 20, 2019; and Agreement between the Government of the United States

of America and the Government of the Republic of Honduras for Cooperation in the Examination of Protection Claims,

September 25, 2019.

73 U.S. Department of Homeland Security, “Transcript: Press Conference in Yuma, AZ on August 8, 2019,” August 9,

2019.

74 See, for example, Washington Office on Latin America (WOLA), “U.S.-Honduras ‘Safe’ Third Country

Negotiations Show the Grave Cruelty of the Trump Administration’s Migration Efforts,” press release, September 12,

2019.

75 Carlos Mario Marquez, “Preocupación en Centroamérica por anuncio de Trump de Suspender Ayuda,” Agence

France Presse, April 1, 2019.

76 USAID, Foreign Aid Explorer: The official Record of U.S. Foreign Aid, accessed June 2019; and International

Monetary Fund, World Economic Outlook Database April 2019, April 9, 2019.

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Guatemala’s eastern dry corridor, including acutely malnourished children.
77

Aid organizations

argue that the loss of U.S. support could accelerate out-migration from such areas.
78

The suspension of U.S. assistance also could jeopardize recent improvements in security

conditions in the Northern Triangle. Although the Administration has continued to support

specialized security force units established by U.S. agencies to support joint law enforcement

operations, it has withdrawn funding for other security assistance programs, such as community

policing initiatives, crime and violence prevention programs, and efforts to strengthen security

and justice sector institutions. Homicide rates are reportedly increasing once again in some

neighborhoods in Honduras from which USAID withdrew due a lack of funds.
79

In addition to those socioeconomic and security concerns, the Northern Triangle is at serious risk

of backsliding with respect to governance and rule of law. U.S. assistance has offered crucial

technical and diplomatic support to prosecutors combating high-level corruption, allowing them

to take on unprecedented cases in recent years. Their tentative progress has generated fierce

backlash from political and economic elites who benefit from the status quo.
80

An extended

suspension of U.S. assistance could undercut U.S. allies within the Northern Triangle

governments and empower the sectors most resistant to change.

Congress appears to have provided the President with significant authority—in annual

appropriations legislation (P.L. 115-141 and P.L. 116-6) and the Foreign Assistance Act of 1961,

as amended (22 U.S.C. §§2151 et seq.)—to reprogram assistance away from the Northern

Triangle. If Congress thinks the Administration is using that authority in ways that do not reflect

congressional intent, it could enact legislation to restrict the Administration’s ability to transfer or

reprogram assistance. For example, the Labor, Health and Human Services, Education, Defense,

State, Foreign Operations, and Energy and Water Development Appropriations Act, 2020 (H.R.

2740, H.Rept. 116-78), passed by the House in June 2019, would appropriate “not less than”

$540.85 million for Central America and strengthen the funding directives for FY2017, FY2018,

and FY2019 foreign aid appropriations for the region. Similarly, the FY2020 State, Foreign

Operations, and Related Programs Appropriations Act (S. 2583, S.Rept. 116-126), introduced in

the Senate, would direct that “not less than” $525 million appropriated in FY2019 be made

available for the region. The Central America Reform and Enforcement Act (S. 1445, Schumer),

introduced in May 2019, would go further, prohibiting the reprogramming of any assistance

appropriated for the Northern Triangle nations since FY2016.

Congress also could consider a foreign assistance authorization for Central America to guide aid

levels and priorities and reassure partners in the region that the United States is committed to a

long-term effort. S. 1445 would require the Secretary of State to develop a new five-year

interagency strategy to advance reforms in Central America and would authorize $1.5 billion in

FY2020 to carry out certain activities in support of the new strategy. The United States-Northern

Triangle Enhanced Engagement Act (H.R. 2615, Engel), which the House passed in July 2019,

77 U.S. Congress, House Committee on Foreign Affairs, Subcommittee on Western Hemisphere, Civilian Security and

Trade, Assessing the Impact of Cutting Foreign Assistance to Central America, Written Testimony of Rick Jones,

Senior Technical Advisor for Latin America and the Caribbean, Catholic Relief Services, 116th Cong., 1st sess.,

September 25, 2019.

78 “U.S. Aid Cuts to Central America May Backfire, Fueling Migration North: Charities,” Reuters, April 2, 2019.

79 CRS meeting with USAID officials, August 2019.

80 Jeff Ernst and Elisabeth Malkin, “In a Corruption Battle in Honduras, the Elites Hit Back,” New York Times, July 1,

2018; “El Salvador’s Top Cop Pursues Politicians; Now Some Want Him Gone,” Reuters, December 20, 2018; and

Héctor Silva Ávalos and Parker Asmann, “5 Takeaways from CICIG, Guatemala’s Anti-Corruption Experiment,”

Insight Crime, September 5, 2019.

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would authorize $577 million for the U.S. Strategy for Engagement in Central America in

FY2020, including “not less than” $490 million for the Northern Triangle. The measure would

also require the State Department, in coordination with other agencies, to develop five-year

strategies to support inclusive economic growth, combat corruption, strengthen democratic

institutions, and improve security conditions in the Northern Triangle.

Political Will in Central America

Although many analysts assert that Central American nations will require external support to

address their challenges, they also contend that significant improvements in the region ultimately

will depend on Central American leaders carrying out substantial internal reforms.
81

That

contention is supported by multiple studies conducted over the past decade, which have found

that aid recipients’ domestic political institutions play a crucial role in determining the relative

effectiveness of foreign aid.
82

Some scholars argue that this conclusion is also supported by the

region’s history:

How did Costa Rica do so much better by its citizens than its four northern neighbors since

1950? The answer, we contend, stems from the political will of Costa Rican leaders. Even

though they shared the same disadvantageous economic context of the rest of Central

America, Costa Rica’s leaders adopted and kept democracy, abolished the armed forces,

moderated income inequality, and invested in education and health over the long haul.

The

leaders of the other nations did not make these choices, at least not consistently enough to

do the job.83

One of the underlying assumptions of the U.S. Strategy for Engagement in Central America is

that “Central American governments will continue to demonstrate leadership and contribute

significant resources to address challenges” if they are supported by international partners.
84

Such

political will cannot be taken for granted, however, given that previous U.S. efforts to ramp up

assistance to Central America—including substantial increases in development aid during the

1960s under President John F. Kennedy’s Alliance for Progress and massive aid flows in the

1980s during the Central American conflicts (see Figure 5)—were not always matched by far-

reaching domestic reforms in the region.
85

81 See, for example, Roger Noriega, “How to Turn Off the Latin Refugee Flood at the Source,” New York Post,

February 24, 2017; and Adriana Beltrán, “Children and Families Fleeing Violence in Central America,” Washington

Office on Latin America (WOLA), February 21, 2017.

82 Jonathan Glennie and Andy Sumner, The $138.5 Billion Question: When Does Foreign Aid Work (and When Doesn’t

It)?, Center for Global Development, CGD Policy Paper 049, November 2014, pp. 35-42.

83 John A. Booth, Christine J. Wade, and Thomas W. Walker, Understanding Central America: Global Forces,

Rebellion, and Change, 6th ed. (Boulder, CO: Westview Press, 2015), pp. 23-24.

84 White House, U.S. Strategy for Engagement in Central America, March 16, 2015.

85 See, for example, Eduardo Frei Montalva, “The Alliance that Lost its Way,” Foreign Affairs, April 1967; and U.S.

Congress, Joint Economic Committee, The Caribbean Basin: Economic and Security Issues, committee print, Central

America: Continuing U.S. Concerns, study paper prepared by Nina M. Serafino of the Congressional Research Service,

102nd Cong., 2nd sess., January 1993, S.Prt. 102-110 (Washington, DC: GPO, 1993).

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Figure 5. U.S. Assistance to Central America: FY1946-FY2017

(obligations in billions of constant 2017 U.S. dollars)

Source: CRS presentation of data from USAID, Foreign Aid Explorer: The Official Record of U.S. Foreign Aid, at

https://explorer.usaid.gov/data.

Note: Includes aid obligations from all U.S. government agencies.

Over the past few years, Central American governments have demonstrated varying levels of

commitment to internal reform. As discussed previously, the three Northern Triangle governments

worked together to develop the Alliance for Prosperity, which includes numerous policy

commitments. At the same time, tax collection has remained relatively flat in the region, leaving

governments without the resources necessary to address chronic poverty or other challenges.
86

Moreover, some elected officials in the Northern Triangle have sought to undermine anti-

corruption efforts. For example, Guatemalan President Jimmy Morales refused to renew the

mandate of the U.N.-backed International Commission against Impunity in Guatemala (CICIG by

its Spanish acronym), forcing it to end operations in September 2019. Similarly, Honduran

President Juan Orlando Hernández has thus far refused to renew the mandate of the Organization

of American States (OAS)-backed Mission to Support the Fight against Corruption and Impunity

in Honduras (MACCIH by its Spanish acronym), which expires in January 2020.

Congress could consider a number of actions to support reform efforts in the region. In addition

to placing legislative conditions on aid, which is discussed in the following section (see “Aid

Conditionality”), Congress could continue to offer vocal and financial support to individuals and

institutions committed to change. For example, H.Rept. 116-9, notes that the Consolidated

Appropriations Act, 2019 (P.L. 116-6), “supports efforts to strengthen the rule of law by

combating corruption and impunity in Central America” by providing $6 million for CICIG, $5

million for MACCIH, and $20 million for the attorneys general of El Salvador, Guatemala and

86 Instituto Centroamericano de Estudios Fiscales, Perfiles Marcofiscales de Centroamérica: Por Una Política Fiscal

para la Democracia y el Desarrollo, No.11, April 2019, p. 27.

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Honduras. The report also states that “the Secretary of State should consider the capacity, record,

and commitment to the rule of law of each office” when allocating funds.

Congress could also continue to call attention to individuals in the region who seek to subvert

reform efforts. For example, a reporting requirement in S.Rept. 115-282, made binding by the

Consolidated Appropriations Act, 2019 (P.L. 116-6), required the Secretary of State to produce an

assessment of grand corruption in the Northern Triangle. The report was required to include a list

of senior Salvadoran, Guatemalan, and Honduran officials known, or credibly alleged, to have

committed or facilitated such corruption and a description of steps taken to impose sanctions

pursuant to the Global Magnitsky Human Rights Accountability Act (P.L. 114-328). The report,

issued in May 2019, lists more than 60 current and former officials. It also notes that between

January and April 2019, the State Department used its various sanctions authorities to revoke the

visas of 85 individuals from the Northern Triangle suspected of corrupt acts.
87

Congress could put additional pressure on corrupt individuals and attempt to deter others by

enacting legislation to establish new economic sanctions regimes or by recommending sanctions

pursuant to existing law. For example, the Guatemala Rule of Law Accountability Act (H.R.

1630, Torres) would direct the President to impose targeted sanctions (asset blocking and visa

restrictions) against any current or former Guatemalan official who has knowingly (1) committed

or facilitated significant corruption; (2) obstructed Guatemalan investigations or prosecutions of

such corruption; (3) misused U.S. equipment provided to the Guatemalan military or police to

combat drug trafficking or secure the border; (4) disobeyed rulings of the Guatemalan

constitutional court; or (5) impeded or interfered with the work of any U.S. government agency or

any institution that receives contributions from the U.S. government, including CICIG. Similarly,

the United States-Northern Triangle Enhanced Engagement Act (H.R. 2615, Engel) would direct

the President to impose targeted sanctions against any person the President determines to be

engaged in an act of significant corruption that affects a Northern Triangle country, including

corruption related to government contracts, bribery and extortion, or the facilitation or transfer of

the proceeds of corruption.

Aid Conditionality

As noted previously, Congress has placed strict conditions on foreign aid for Central America in

an attempt to bolster political will in the region and ensure U.S. assistance is used as effectively

as possible (see “Conditions on Assistance”). Although U.S. officials acknowledge that aid

restrictions give them leverage with partner governments, some argue that recent appropriations

measures have included too many conditions and have withheld too much aid. The Consolidated

Appropriations Act, 2019 (P.L. 116-6), requires the State Department to withhold 50% of

“assistance for the central governments of El Salvador, Guatemala, and Honduras” until the

Secretary of State certifies that those governments are addressing 16 different issues of

congressional concern. Some U.S. officials contend that Congress should focus on a few top

priorities given the limited capacities of the Northern Triangle governments. Along those lines,

the FY2020 State, Foreign Operations, and Related Programs Appropriations Act, S. 2583

(S.Rept. 116-126) would require the Northern Triangle governments to meet five key conditions.

U.S. officials also argue that by subjecting “assistance for the central governments” to

withholding requirements, Congress effectively prevents U.S. agencies from carrying out some

programs that would advance U.S. interests and help the governments meet the conditions. For

example, the State Department is required to withhold U.S. assistance to support police reform

87 U.S. Department of State, Report to Congress on Corruption in El Salvador, Guatemala, and Honduras, May 2019,

available at https://www.insightcrime.org/wp-content/uploads/2019/05/US-CentAm-Corruption-List .

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efforts until it can certify that each government is “creating a professional, accountable civilian

police force and ending the role of the military in internal policing.” Similarly, the State

Department is required to withhold U.S. assistance to strengthen tax collection agencies until it

can certify that each government is “implementing tax reforms.”
88

Congress could prevent such

unintended consequences by waiving withholding requirements for certain types of assistance.

The Consolidated Appropriations Act, 2019 (P.L. 116-6), for example, states that the withholding

requirements on assistance for the central governments of El Salvador, Honduras, and Guatemala

“shall not apply to funds appropriated” for CICIG, MACCIH, humanitarian assistance, or food

security programs.
89

Additionally, U.S. officials note that withholding requirements have contributed to delays in the

implementation of the Central America strategy. In FY2016, the first year Congress approved

funding for the strategy, Congress enacted full-year appropriations legislation on December 18,

2015. The State Department did not issue the final certification (for Honduras), however, until

September 30, 2016—the last day of the fiscal year. Due to the certification requirements, as well

as delays in the budget process and congressional holds, most aid did not begin to be delivered to

the region until mid-2017. Although U.S. agencies obligated some aid not subject to the

withholding requirements at earlier dates, they were hesitant to commit resources to specific

activities until they knew whether they would have access to the remaining funding. Similar

delays have occurred during the past three fiscal years.

Nevertheless, some Members of Congress and civil society organizations have occasionally

criticized the State Department for issuing certifications too quickly, particularly with regard to

human rights conditions. For example, on November 28, 2017, the State Department certified that

Honduras had met the conditions necessary to receive assistance appropriated for FY2017,

including by taking effective steps to “protect the right of political opposition parties, journalists,

trade unionists, human rights defenders, and other civil society activists to operate without

interference.”
90

The State Department issued the certification two days into Honduras’s disputed

presidential election, and just days before the Honduran government declared a state of

emergency to suspend certain constitutional rights and human rights organizations began to

document the use of excessive force by security forces to disperse opposition protests.
91

Human

rights groups and some Members of Congress criticized the certification, with one Honduran

union leader reportedly declaring, “They’re practically giving carte blanche so they can violate

human rights in this country under the umbrella of the United States.”
92

Studies of aid conditionality have found that conditions generally fail to alter aid recipients’

behavior when recipients think donors are unlikely to follow through on their threats to withhold

aid.
93

Members of Congress who are concerned that the State Department is issuing certifications

too quickly and thereby weakening the effectiveness of human rights conditions could seek

88 See Section 7045(a)(1)(M) and (O) of the Consolidated Appropriations Act, 2019 (P.L. 116-6).

89 See Section 7045(a)(4)(A) of the Consolidated Appropriations Act, 2019 (P.L. 116-6).

90 U.S. Department of State, Certification Pursuant to Section 7045(a)(4)(B) of the Department of State, Foreign

Operations, and Related Programs Appropriations Act, 2017 (Div. J, P.L. 115-31), November 28, 2017.

91 U.N. High Commissioner for Human Rights, Human Rights Violations in the Context of the 2017 Elections in

Honduras, March 12, 2018.

92 Christopher Sherman, Garance Burke, and Martha Mendoza, “Trump Administration Praises Honduras Amid

Election Crisis,” Associated Press, December 7, 2017.

93 Andrew Mold, Policy Ownership and Aid Conditionality in the Light of the Financial Crisis: A Critical Review,

Organisation for Economic Co-operation and Development, Development Centre Studies, 2009; Melissa G. Dalton,

Smart Conditions: A Strategic Framework for Leveraging Security Assistance, Center for Strategic & International

Studies, July 2016.

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changes to the certification process. For example, Congress could set more specific and/or

measureable criteria for the Northern Triangle governments to meet prior to receiving assistance.

The Berta Cáceres Human Rights in Honduras Act (H.R. 1945, H. Johnson) would suspend all

U.S. security assistance to Honduras and direct U.S. representatives at multilateral development

banks to oppose all loans for Honduran security forces until the State Department certifies that

Honduras has effectively investigated and prosecuted a series of specific human rights abuses and

satisfied several other conditions.

Implications of Other U.S. Policy Changes

Given Central America’s geographic proximity and close migration and commercial ties to the

United States, changes in U.S. immigration, trade, and drug control policies can have far-reaching

effects in the region. As Congress considers the future of the U.S. Strategy for Engagement in

Central America, it also may evaluate how changes to other U.S. policies might support or hinder

the strategy’s objectives.

Immigration

Central American nations have strong migration ties to the United States. In 2017, an estimated

3.3 million individuals born in Central America were living in the United States, including more

than 1.3 million Salvadorans; 924,000 Guatemalans; 603,000 Hondurans; and 252,000

Nicaraguans.
94

Those immigrant populations play crucial roles in Central American economies.

Remittances from Central American migrants abroad—the vast majority (79%) of whom live in

the United States
95

—totaled nearly $22 billion in 2018 and were equivalent to 11% of GDP in

Nicaragua, 12% of GDP in Guatemala, 20% of GDP in Honduras, and nearly 21% of GDP in El

Salvador (see Figure 6, below).

Many Central Americans reside in the United States in an unauthorized status, however, and are

therefore at risk of being removed (deported) from the country. The Pew Research Center

estimates that nearly 1.9 million (about 58%) of the Central Americans residing in the United

States in 2017 were unauthorized.
96

In FY2018, U.S. Immigration and Customs Enforcement

(ICE) removed nearly 96,000 Central Americans, including approximately 50,000 Guatemalans,

29,000 Hondurans, and 15,000 Salvadorans.
97

The Trump Administration’s immigration policies could accelerate removals from the United

States. Since September 2017, for example, the Administration has terminated Temporary

Protected Status (TPS), which provides relief from removal, for approximately 4,500 Nicaraguans

and 81,000 Hondurans who have lived in the United States since 1998 and 252,000 Salvadorans

who have lived in the United States since 2001. TPS was scheduled to expire on January 5, 2019,

for Nicaraguans, and on September 9, 2019, for Salvadorans, but it remains in place pending the

resolution of a lawsuit challenging the Administration’s termination decision. A lawsuit has also

94 U.S. Census Bureau, 2017 American Community Survey 5-Year Estimates, accessed by CRS on American Factfinder

Website, June 2019.

95 Although most Central American migrants reside in the United States, about 45% of Nicaraguan migrants reside in

Costa Rica. U.N. Population Division, Department of Economic and Social Affairs, International Migrant Stock: The

2017 Revision, December 2017.

96 Jeffrey S. Passel and D’Vera Cohn, Mexicans Decline to Less than Half the U.S. Unauthorized Immigration

Population for the First Time, Pew Research Center, June 12, 2019.

97 U.S. Immigration and Enforcement (ICE), Fiscal Year 2018 ICE Enforcement and Removal Operations Report,

December 14, 2018, pp. 17-18.

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temporarily halted the termination of TPS for Hondurans, scheduled for January 5, 2020.
98

Although some individuals may be able to obtain another lawful status, the remainder would be

subject to removal once TPS expires. In June 2019, the House passed the American Dream and

Promise Act of 2019 (H.R. 6, Roybal-Allard), which would provide a path toward permanent

resident status for some TPS holders.

Figure 6. Remittances to Central America: 2018

Sources: CRS, using remittance data from each nation’s central bank and GDP data from IMF, World Economic

Outlook Database April 2019, April 9, 2019.

Central American officials are concerned that increased deportations could aggravate social

tensions and fuel instability in the region. Although deportees could bring new skills and financial

resources back to their countries of origin, they could also displace local workers competing for

scarce employment opportunities.
99

In addition, increased deportations could exacerbate poverty,

as some 3.5 million households in the region reportedly depend on remittances for more than half

of their household income.
100

During the 1990s, U.S. deportations played a key role in the spread

of gang violence in Central America. Consequently, many observers are concerned that a new

wave of deportations could exacerbate security challenges in the region.
101

Although most Central

Americans at risk of deportation today have no connections to gangs, deported youth could

become vulnerable to gang recruitment.
102

If deportations accelerate, Congress could help mitigate the impact on the region (and potentially

reduce the likelihood of repeat migration) by appropriating increased assistance for reintegration

98 For more information on TPS, see CRS Report RS20844, Temporary Protected Status: Overview and Current Issues,

by Jill H. Wilson, and CRS Legal Sidebar LSB10215, Federal District Court Enjoins the Department of Homeland

Security from Terminating Temporary Protected Status, by Hillel R. Smith.

99 “El Salvador: Assessing the Economic Impact of TPS Termination,” Latin American Economy & Business, February

2018.

100 “Trends in Central American Migration,” Latin American Caribbean & Central America Report, August 2018.

101 Joshua Partlow, “Dread in El Salvador as Gang Members Return,” Washington Post, May 23, 2017.

102 Micaela Sciatschi, “By Deporting 200,000 Salvadorans, Trump may be Boosting Gang Recruitment,” Washington

Post, February 12, 2018.

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efforts. From October 2013 to April 2018, USAID provided approximately $27 million to the

International Organization for Migration to provide short-term assistance to migrants returning to

the Northern Triangle and support deportees’ reintegration into their communities of origin.
103

Trade

Most Central American nations have close commercial ties to the United States, and they have

become more integrated into U.S. supply chains since the adoption of CAFTA-DR. In 2018, U.S.

merchandise trade with the seven nations of Central America totaled nearly $51.5 billion.

Although Central America accounts for a small portion (1.2%) of total U.S. trade, the United

States is a major market for Central American goods.
104

In 2018, the value of merchandise exports

to the United States was equivalent to about 10% of GDP in El Salvador, 12% of GDP in Belize,

20% of GDP in Honduras, and 27% of GDP in Nicaragua (see Figure 7, below).

Figure 7. Central American Exports to the United States: 2018

Sources: CRS, using U.S. import data from the U.S. Department of Commerce, as presented by Global Trade

Atlas, accessed June 2019; and GDP data from IMF, World Economic Outlook Database April 2019, April 9, 2019.

Given the economic importance of access to the U.S. market, Central American nations have

closely tracked recent developments in U.S. trade policy. Some in the region were relieved by

President Trump’s decision to withdraw from the Trans-Pacific Partnership (TPP), a proposed

trade agreement among 12 Asia-Pacific countries.
105

The agreement would have allowed Vietnam

and other nations to export apparel to the United States duty-free, which could have eliminated

much of the competitive advantage now enjoyed by Central American apparel producers.
106

The

103 U.S. Government Accountability Office, Central America: USAID Assists Migrants Returning to their Home

Countries, but Effectiveness of Reintegration Efforts Remains to be Determined, GAO-19-62, November 2018,

https://www.gao.gov/assets/700/695371 .

104 U.S. Department of Commerce data, as presented by Global Trade Atlas, accessed June 2019.

105 For more information on the Trans-Pacific Partnership (TPP) and U.S. withdrawal from the agreement, see CRS In

Focus IF10000, TPP: Overview and Current Status, by Brock R. Williams and Ian F. Fergusson.

106 CRS Report R44610, U.S. Textile Manufacturing and the Proposed Trans-Pacific Partnership Agreement, by

Michaela D. Platzer.

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Salvadoran government and the Central American-Dominican Republic Apparel and Textile

Council estimated that the first year of TPP implementation would have led to a 15%-18%

contraction in industrial employment in the CAFTA-DR region.
107

If the United States enters into

a similar trade agreement in the future, Congress could consider granting Central American

nations trade preferences equal to those included in the new agreement to ameliorate the shock to

economies in the region.
108

In October 2017, U.S. Trade Representative Robert Lighthizer reportedly asserted that the Trump

Administration intends to modernize trade agreements throughout Latin America.
109

Central

American leaders think the Administration is unlikely to prioritize the renegotiation of CAFTA-

DR or the U.S.-Panama Free Trade Agreement, however, since President Trump has focused

primarily on reducing U.S. trade deficits and the United States ran a $10.3 billion trade surplus

with Central America in 2018.
110

Nevertheless, other potential changes to trade policy, such as

imposing tariffs on imports, could be detrimental to Central American economies. In 2017, the

IDB estimated that if the United States increased the average tariff for imports from Central

America by 20% of their value, the region’s GDP would decline by 2.2-4.4 percentage points.
111

Drug Control

Although illicit drug production and consumption remain relatively limited in Central America,
112

the region is seriously affected by the drug trade due to its location between cocaine producers in

South America and consumers in the United States. In 2017, the State Department reported that

about 90% of cocaine trafficked to the United States transits through Central America, along with

unknown quantities of opiates, cannabis, and methamphetamine.
113

The criminal groups that

move cocaine through the region receive immense profits; in 2016, a security analyst estimated

that trafficking generated $700 million per year in Honduras and similar amounts in Guatemala

and El Salvador.
114

Violence in the region has escalated as rival criminal organizations have

fought for control over the lucrative drug trade and gangs have battled to control local

distribution. The illicit funds produced by drug trafficking have also fostered corruption and

impunity in Central America as criminal organizations have financed political campaigns and

107 U.S. International Trade Commission, Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy

and on Specific Industry Sectors, May 2016, p. 270.

108 Eric Farnsworth, “How the TPP Could Disrupt U.S. Aid Plans in Central America,” World Politics Review, August

24, 2015.

109 “Lighthizer Says a Slew of Latin American Free Trade Deals must be ‘Modernized’ after NAFTA,” Inside U.S.

Trade, October 3, 2018.

110 “Central American Leaders Confident Trump Won’t Revoke CAFTA,” Agence France Presse, January 25, 2017;

and U.S. Department of Commerce data, as presented by Global Trade Atlas, accessed June 2019.

111 Inter-American Development Bank, Running Out of Tailwinds: Opportunities to Foster Inclusive Growth in Central

America and the Dominican Republic, 2017, p. 80.

112 According to State Department estimates, about 310 hectares of opium poppy were under cultivation in Guatemala

in 2016 (most recent year available), with the potential to produce 7 metric tons of heroin. In comparison, Mexico had

an estimated production potential of 685 metric tons of heroin in 2017. U.S. Department of State, Bureau of

International Narcotics and Law Enforcement Affairs, 2019 International Narcotics Control Strategy Report, Volume I:

Drug and Chemical Control, March 2019, pp. 23-25.

113 U.S. Department of State, Bureau of International Narcotics and Law Enforcement Affairs, 2017 International

Narcotics Control Strategy Report, Volume I: Drug and Chemical Control, March 2017. The State Department did not
include updated estimates in its 2018 or 2019 reports.

114 Steven Dudley, “How Drug Trafficking Operates, Corrupts in Central America,” Insight Crime, July 6, 2016.

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parties; distorted markets by channeling proceeds into legitimate and illegitimate businesses; and

bribed security forces, prosecutors, and judges.
115

Upon the launch of the Mérida Initiative in 2008, the George W. Bush Administration pledged to

reduce drug demand in the United States as part of its “shared responsibility” to address the

challenges posed by transnational crime.
116

The Trump Administration, like the Obama

Administration before it, has reiterated that pledge, asserting that the United States “recognizes its

responsibility to address the demand for illegal drugs.”
117

Between FY2009 and FY2019, U.S.

expenditures on drug demand reduction efforts (i.e., prevention and treatment) increased from

$9.2 billion to $17.3 billion and the portion of the U.S. drug control budget dedicated to demand

reduction increased from 37% to 52%.
118

The estimated number of individuals aged 12 or older

currently using (past month use of) cocaine declined from about 1.9 million in 2008 to 1.4 million

in 2011. It has climbed significantly since then, however, exceeding 1.9 million in 2018.
119

Legislative measures to expand or improve the effectiveness of programs to reduce cocaine and

other illicit drug consumption in the United States would complement efforts under the Central

America strategy and would maintain the sense of “shared responsibility” that has guided U.S.

relations with the region over the past decade. The 116
th

Congress could build on measures

adopted during the 115
th
Congress to address substance abuse and treatment, such as the Support

for Patients and Communities Act (P.L. 115-271).
120

The 116
th
Congress could also engage in a

broader reassessment of U.S. drug control policy. It may draw on the work of the recently

launched Western Hemisphere Drug Policy Commission, authorized by the Department of State

Authorities Act, Fiscal Year 2017 (P.L. 114-323), which is charged with conducting a

comprehensive review of U.S. counternarcotics policies in the region.

Outlook
Congress has appropriated nearly $2.6 billion of foreign aid since FY2016 to promote prosperity,

strengthen governance, and improve security in Central America. Those are difficult, long-term

endeavors, however, and U.S. efforts are about 2½ years into implementation. Although Central

American nations have made some tentative progress in addressing long-standing challenges, the

region is at serious risk of backsliding. Political and economic elites that benefit from the status

quo are working to undermine anti-corruption efforts, and the Trump Administration has begun to

withdraw the diplomatic pressure and foreign aid that had provided incentives for structural

reforms. Necessary changes to achieve success in the medium and long terms likely would

include stronger governing institutions, increased tax collection, more opportunities for young

115 Ibid.

116 U.S. Department of State, Office of the Spokesman, “Joint Statement on the Mérida Initiative: A New Paradigm for

Security Cooperation,” October 22, 2007.

117 U.S. Department of State, Office of the Spokesperson, “United States Key Deliverables for the June 15-16, 2017

Conference on Prosperity and Security in Central America,” press release, June 16, 2017.

118 Office of National Drug Control Policy (ONDCP), National Drug Control Budget, FY2018 Funding Highlights,

May 2017, p. 19; and ONDCP, National Drug Control Budget, FY2020 Funding Highlights, March 2019, p. 14. These

figures may not be strictly comparable due to a change in how Medicaid benefit outlays for substance use treatment are

estimated. Moreover, there is considerable debate over whether the National Drug Control Budget captures the full

scope of U.S. counter-drug activities.

119 ONDCP, National Drug Control Strategy, Data Supplement, 2016, p.19., Department of Health and Human

Services, Substance Abuse and Mental Health Services Administration, Results from 2018 National Survey on Drug

Use and Health: Detailed Tables, August 2019.

120 For more information, see CRS Report R45423, Public Health and Other Related Provisions in P.L 115-271, the

SUPPORT for Patients and Communities Act, coordinated by Elayne J. Heisler and Johnathan H. Duff.

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people, and extensive international donor support over an extended period. Absent such efforts,

conditions are likely to remain poor in several Central American countries, contributing to

political and social instability that—as demonstrated by recent migration flows—is likely to

affect the United States.

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Appendix. Appropriations for the U.S. Strategy for

Engagement in Central America by Country and

Foreign Assistance Account: FY2016-FY2020

Table A-1. FY2016 Funding for the U.S. Strategy for Engagement in Central America

(appropriations in millions of current U.S. dollars)

DA GHP ESF INCLE NADR IMET FMF OPIC Total

Belize — — — — — 0.2 1.0 — 1.2

Costa Rica — — — — — 0.4 1.4 — 1.8

El Salvador 65.0 — — — — 1.0 1.9 — 67.9

Guatemala 112.0 13.0 — — — 0.8 1.7 — 127.5

Honduras 93.0 — — — — 0.8 4.5 — 98.3

Nicaragua 10.0 — — — — — — — 10.0

Panama — — — — 0.5 0.7 2.1 — 3.3

CARSI — — 126.5 222.0 — — — — 348.5

Other Regional Programs 19.4 — 57.0 — — — 13.0 2.0 91.4

Total 299.4 13.0 183.5 222.0 0.5 3.9 25.7 2.0 750.0

Source: U.S. Department of State, Congressional Budget Justification for Department of State, Foreign Operations, and

Related Programs, Fiscal Year 2018, May 23, 2017.

Notes: Figures may not sum to totals due to rounding. DA = Development Assistance; GHP = Global Health

Programs; ESF = Economic Support Fund; INCLE = International Narcotics Control and Law Enforcement;

NADR = Nonproliferation, Anti-terrorism, Demining, and Related Programs; IMET = International Military

Education and Training; FMF = Foreign Military Financing; OPIC = Overseas Private Investment Corporation; and

CARSI=Central America Regional Security Initiative.

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service 34

Table A-2. FY2017 Funding for the U.S. Strategy for Engagement in Central America

(appropriations in millions of current U.S. dollars)

DA GHP ESF INCLE NADR IMET FMF Total

Belize — — — — — 0.2 1.0 1.2

Costa Rica — — — — — 0.7 5.0 5.7

El Salvador 70.0 — — — — 0.9 1.9 72.8

Guatemala 110.0 13.0 — — — 0.8 1.7 125.5

Honduras 90.0 — — — — 0.8 4.5 95.3

Nicaragua 9.5 — — — — 0.1 — 9.7

Panama — — — — 0.5 0.8 2.0 3.3

CARSI — — 104.2 225.0 — — — 329.2

Other Regional Programs 17.6 — 12.0 — — — 12.5 42.1

Total 297.2 13.0 116.2 225.0 0.5 4.2 28.6 684.8

Source: U.S. Department of State, Congressional Budget Justification, Foreign Operations, Appendix 2, Fiscal Year

2019, March 14, 2018.

Education and Training; FMF = Foreign Military Financing; and CARSI=Central America Regional Security

Initiative.

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service 35

Table A-3. FY2018 Funding for the U.S. Strategy for Engagement in Central America

(estimated appropriations in millions of current U.S. dollars)

DA GHP ESF INCLE NADR IMET FMF Total

Belize — — — — — 0.1 1.0 1.1

Costa Rica — — — — — 0.7 5.0 5.7

El Salvador 55.0 — — — — 0.7 1.9 57.7a

Guatemala 93.0 13.0 — — — 0.7 1.7 108.5a

Honduras 75.0 — — — — 0.7 4.0 79.7a

Nicaragua 10.0 — — — — — — 10.0

Panama — — — — 0.5 0.6 2.0 3.1

CARSI — — 104.2 215.0 — — — 319.2a

Other Regional Programs 17.0 — — — — — 12.5 29.5a

Total 250.0 13.0 104.2 215.0 0.5 3.6 28.1 614.5a

Sources: U.S. Department of State, Congressional Budget Justification, Department of State, Foreign

Operations, and Related Programs, Supplementary Tables, Fiscal Year 2020, May 2019; and “Explanatory

Statement Submitted by Mr. Frelinghuysen, Chairman of the House Committee on Appropriations, Regarding the

House Amendment to Senate Amendment on H.R. 1625,” Congressional Record, vol. 164, no. 50—book III

(March 22, 2018), p. H2851.

Notes: Figures may not sum to totals due to rounding. DA = Development Assistance; GHP = Global Health
Programs; ESF = Economic Support Fund; INCLE = International Narcotics Control and Law Enforcement;
NADR = Nonproliferation, Anti-terrorism, Demining, and Related Programs; IMET = International Military
Education and Training; FMF = Foreign Military Financing; and CARSI=Central America Regional Security
Initiative.
a. The Trump Administration reprogrammed approximately $400 million of bilateral and regional aid that it
had previously allocated to El Salvador, Guatemala, and Honduras. Revised allocations are not yet available.

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service 36

Table A-4. FY2019 Funding for the U.S. Strategy for Engagement in Central America

(estimated appropriations in millions of current U.S. dollars)
DA GHP ESF INCLE NADR IMET FMF Total

Belize — — — — — — — —

Costa Rica — — — — — 0.7 7.5 8.2b

El Salvador — — — — — — — —

Guatemala — 13.0 — — — — — 13.0

Honduras — — — — — — — —

Nicaragua — — — — — — — —

Panama — — — — 0.5 — — 0.5

CARSI — — 100.0 190.0b — — — 290.0

Other Regional Programs 190.0a — — — — 3.4a 22.5a 215.9

Total 190.0 13.0 100.0 190.0 0.5 4.1 30.0 527.6

Source: H.Rept. 116-9.

Notes: Figures may not sum to totals due to rounding. DA = Development Assistance; GHP = Global Health

Programs; ESF = Economic Support Fund; P.L. 480 = Food for Peace/Food Aid; INCLE = International Narcotics

Control and Law Enforcement; NADR = Nonproliferation, Anti-terrorism, Demining, and Related Programs;

IMET = International Military Education and Training; FMF = Foreign Military Financing; and CARSI=Central

America Regional Security Initiative.

a. Congress appropriated most FY2019 assistance for Central America as regional aid, giving the State
Department flexibility in allocating the resources among the seven nations of the isthmus.

b. H.Rept. 116-9 stipulates that $32.5 million of CARSI INCLE assistance is to be allocated to Costa Rica.

Table A-5. FY2020 Funding for the U.S. Strategy for Engagement in Central America

(requested appropriations in millions of current U.S. dollars)

ESDF GHP INCLE NADR IMET FMF Total

Belize — — — — 0.2 — 0.2

Costa Rica — — — — 0.4 — 0.4

El Salvador 45.0 — — — 0.7 — 45.7

Guatemala 65.7 3.0 — — 0.8 — 69.4

Honduras 65.0 — — — 0.8 — 65.8

Nicaragua 6.0 — — — — — 6.0

Panama — — — 0.5 0.7 — 1.2

CARSI 95.0 — 155.3 — — — 250.3

Other Regional Programs — — — — — 6.0 6.0

Total 276.7 3.0 155.3 0.5 3.5 6.0 445.0

Sources: U.S. Department of State, Congressional Budget Justification, Department of State, Foreign Operations, and

Related Programs, Supplementary Tables, Fiscal Year 2020, May 2019; and State Department briefing, May 2019.

Notes: Figures may not sum to totals due to rounding. ESDF = Economic Support and Development Fund; GHP

= Global Health Programs; INCLE = International Narcotics Control and Law Enforcement; NADR =

Nonproliferation, Anti-terrorism, Demining, and Related Programs; IMET = International Military Education and

Training; FMF = Foreign Military Financing; and CARSI=Central America Regional Security Initiative.

U.S. Strategy for Engagement in Central America: Policy Issues for Congress

Congressional Research Service R44812 · VERSION 13 · UPDATED 37

Author Information

Peter J. Meyer

Specialist in Latin American Affairs

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan

shared staff to congressional committees and Members of Congress. It operates solely at the behest of and

under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other

than public understanding of information that has been provided by CRS to Members of Congress in

connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not

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copy or otherwise use copyrighted material.

2019-11-12T13:45:02-0500

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