75. Memorandum From the Deputy Assistant Secretary of State for Inter-American Affairs (Sayre) to the President’s Special Assistant for National Security Affairs (Bundy)1

As you know the President asked for task force reports on Guatemala, Bolivia and Colombia.2

As I mentioned in a meeting at the White House while I was still on your staff,3 ARA had set up a committee to study the counterinsurgency problem in several countries. When I returned to ARA, the first country I tackled was Guatemala. We had three or four meetings with Defense, CIA, USIA and State participating. The actions outlined on page 6 are essentially those proposed by the Ad Hoc Committee, but they have been brought up to date.

The assessment is current.

As I understand it what the President wants to know is the current situation and what the United States should be doing to help maintain and improve the situation. I believe the attached paper provides this information but would appreciate your reaction as to whether you consider it adequate.

Mr. Vance thought we should also go into all the contingencies should the present Peralta government fall. I would agree that we should do this if we thought that the government would fall within the immediate future. However, the situation in Guatemala is such that we do not anticipate any sudden or violent change down there in the near future, that is, the next 60 or 90 days. Accordingly, my own feeling is that an attempt to determine contingencies at this time would not be a very profitable exercise. We have, however, asked CIA to come up with a list of all of the leading personalities in the political arena in Guatemala with an indication of their political complexion. As soon as this is done and discussed with us here in State, it would become an annex to the attached paper.

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Colombia and Bolivia are slightly different stories. On Colombia especially, I think we will want to give serious consideration to contingencies. We are working on those papers and hopefully will have them to you next week.

In the meantime, after you have looked over the Guatemala paper I would appreciate an indication from you that we are heading in the right direction.4



Assessment of Current Situation

A. Political

The present regime began governing after the overthrow of Ydigoras with a fairly broad degree of public support. It was avowedly an interim government and announced that it would return to constitutionality and free elections as soon as feasible. In 1964, a time table was announced which called for the promulgation of a constitution in March 1965 and elections to be held within six months from that date. A Constituent Assembly was formed consisting of most important middle-of-the-road parties. The regime inspired confidence among the business community for a considerable period and was helped in this regard by a fairly vigorous campaign to reduce the grosser aspects of corruption so evident in the Ydigoras government.

Over the past twelve months, however, the regime has gradually lost a part of its original support. This loss has been caused primarily by Peralta’s failure to adhere to the original time-table for return to constitutional government and uncertainty over his intentions. The promised constitution was not promulgated in March, and until recently there had been growing indications that Peralta intended to seek to perpetuate his regime until at least 1967. In this atmosphere, an important left-of-center political party (PR, headed by Mario PID and the right-of-center [Page 183] MLN, was participating in the Constituent Assembly, has resigned in a bloc from the Assembly and is now in full opposition, because the Assembly refused to prohibit leaders of past coups from being presidential candidates.

There have been severe strains within the two parties remaining in the Constituent Assembly because of political maneuvering by several potential presidential candidates attempting to get Peralta’s official sanction as the government candidate for future elections. The resulting progressive deterioration has given rise to fears that splits within the middle-of-the-road parties, and within the military itself, might even lead to civil war, creating a vacuum which could be exploited by trained communist minorities.

The situation has been ameliorated by a resolution passed by the Constituent Assembly on June 9. This resolution has fixed the following timetable for the country’s return to constitutional rule: 1) promulgation of the constitution on September 15; 2) convocation of presidential and congressional elections on October 1, with the elections to be held within six months from that date; 3) installation of the new congress on June 1, 1966; 4) inauguration of the new president, vice president and supreme court justices on July 1, 1966. Shortly before this resolution, Peralta was quoted in a press interview with the New York Times to the effect that he would not seek to be elected President, but he has not made a public statement to this effect.5

Even though this new timetable differs substantially from that originally set forth, it probably will have the immediate effect of reducing current tensions. It will not, however, eliminate the political maneuverings among the two major parties and may still result in dissatisfaction among other moderate parties if, for example, it becomes clear that Peralta will not permit the PR to conduct an electoral campaign, or if he excludes other moderate left-of-center parties, such as the Christian Democrats, from participation in the electoral process. The government’s intentions in this regard, however, can only be determined over the next several months.

Taking advantage of the political uncertainties which have prevailed, there have been several rumors of coups and one serious attempt at a coup against the Peralta government by non-communist elements. The most serious was one planned by Roberto Alejos, a strong supporter of former President Ydigoras. Alejos, presently in exile in Miami, claimed to have a number of supporters among the military in Guatemala, planned to transport arms and Cuban mercenaries from [Page 184] Miami to Guatemala during May. His plans were thwarted due to close coverage of his activities by Customs and other U.S. enforcement agencies and the sizeable quantity of arms he accumulated were seized by U.S. enforcement officials.6

B. Economic

Indecision in the political field has been matched by indecision in the business of government. The Peralta regime, despite its effectiveness in reducing corruption, has been unable to take any affirmative decisions in the economic and social fields which would have contributed to progress and to reduction of counter-insurgency problems. Government investment programs have stagnated. No AID loans of any consequence have been completed since installation of the Peralta government two years ago. Several loans have been authorized by AID and one loan from the Export-Import Bank has been approved for negotiation, but U.S. representatives have, up to date, been unable to penetrate the suspicion and apathy of Guatemalan officials and complete negotiations on these loans. Neither the AID loans nor the proposed EXIM loan differ in their provisions from loans which have been concluded with all the other countries in Latin America.

This inability to come to terms on international loans in support of the government investment program is not a problem unique with U.S. agencies, and the Guatemalan attitude cannot be attributed solely to suspicion of North American motives. The Inter-American Development Bank has also had its difficulties in working with the GOG. Although the IDB has concluded negotiations on several loans, the rates of disbursement on these loans have been abnormally slow due to GOG inaction. It seems clear that lack of action in the economic field fundamentally results from the unwillingness or inability on the part of some members of the government to make effective decisions.

Fortunately, the governmental shortcomings have been somewhat offset by a vigorously expanding private sector. Exports have continued to climb significantly and there has been a substantial shifting away from dependence on coffee over the last three years due to the emergence of cotton as an important export commodity. There has also been a substantial increase in exports to Guatemala’s partners in the C.A. Common Market, consisting primarily of light manufactures and processed agricultural products. Under the impetus of increasing exports and private investment activity, Guatemalan GNP has risen by [Page 185] over 6% per year over the last 2 years. Current prospects are that it will continue to increase at this rate.

Despite improved exports, rapidly rising imports have resulted in a continued deficit on current account. Since much of the increase in imports has been financed by supplier credits from the U.S., Guatemalan foreign exchange reserves have continued to rise. Immediate foreign exchange difficulties have thus far been avoided, but repayment of supplier credits and short-term debts contracted with private banks in the U.S. will all create a strain over a somewhat longer period.

The major determinant of Guatemala’s immediate economic future however is whether or not the business sector will continue to have confidence in the stability of the government. In the absence of confidence in the future, foreign exchange reserves could rapidly disappear, as they did immediately before the overthrow of Ydigoras.

Guatemalan inability to maintain an effective public investment program has also seriously affected the ability of economic assistance programs to focus on some of the social problems and basic causes of the country’s backwardness. A phenomenon of this backwardness is the sprawling city slums in Guatemala City on which urban terrorism feeds. Community development efforts in the countryside although given lip service by the government are almost non-existent or couched in such grandiose terms as to be impossible of fulfillment. The government appears to feel no need for urgent action in areas of social reform.

C. Internal Defense

For the past several years there have been small bands of guerrillas in Guatemalan eastern hill country which have engaged in isolated raids and occasional political assassinations. The Government has been unable to eliminate these groups although sporadically aggressive patrol activity by the military has succeeded in keeping them somewhat off balance. The guerrillas, headed by Yon Sosa, former Guatemalan army officer, are financed from Cuba and have been conducting their activities independently of the regular Guatemalan Communist Party structure (PGT).

In recent months there have been reports of attempts to coordinate terrorist activities between the PGT and the Yon Sosa guerrillas and turn the attention of both groups to urban rather than rural activities. The extent to which this coordination of efforts has been achieved is uncertain but in any event there has been a significant increase in urban terrorism.

In January there was an attempted assassination of the Chief of the U.S. Army Mission and the USAID motor pool in Guatemala City [Page 186] was burned to the ground. In February, terrorists in Guatemala City, who had intended to assassinate Peralta, threw grenades at a crowd of people and into a Guatemalan Army truck causing several casualties. As an immediate effect of this action, a state of siege was imposed by the Peralta government.

Since imposition of the state of siege, terrorists on March 20 assassinated a police officer who had a reputation as a terrorist, on March 25 threw a grenade at an Army truck which bounced off in the street and killed a girl, and on March 31 machine-gunned a Guatemalan Army building and planted bombs around the city causing several casualties.

On May 2, the U.S. Consulate was sprayed with machine-gun fire and bombs were thrown elsewhere in the city. At noon, May 21, the Vice Minister of Defense was assassinated near his home. On June 7, approximately 7 bombs were exploded in different parts of the city, including the residences of the Brazilian and Nicaraguan Ambassadors, the latter in an apparent protest against the action of these two countries in sending troops to the Dominican Republic.

CAS reports have continued to give strong indication of communist intentions to take direct action against U.S. personnel and installations. As a result of this, security in U.S. Government installations has been increased sharply. The Marine Corps complement in the Embassy has been more than doubled and emergency radio and telephone communications facilities have been installed to increase the alert capability.

The Guatemalan military forces have sufficient training and equipment to counter isolated hit-and-run raids by guerrillas in the rural areas. There are several units in a fair state of readiness, including an airborne infantry company which could be airlifted to severe trouble spots should actions develop beyond the capability of local military commanders. One reason the Guatemalan military forces are not more effective against the guerrillas is the inadequacy of their information and patrol systems. More coordinated effort between police and military efforts should be sought. Another reason is the general attitude of the rural population as a result of the military tendency to behave like an army of occupation in the areas they visit.

In an effort to change their image, the military have engaged in active and fairly successful civic action programs throughout the country. Unfortunately, very few of these programs have been located in areas of rural guerrilla activity.

The qualified success of the military in the rural areas is not matched by security force capabilities within the city. There are substantial elements of the national police force located in Guatemala City but their training and equipment are relatively poor. More importantly [Page 187] there has been no clear definition of the roles of the police and military in counter-insurgency operations either in the cities or in rural areas.

Efforts to improve the police have been hampered by the same lack of GOG ability to make decisions evident in political and economic fields. Current levels of assistance to the police through AID/OPS programs amount to $276,000 of which $100,000 is for U.S. technical advisors. The current level of MAP financing for support of military forces is $1.3 million. Despite indications that the U.S. was prepared to consider increased assistance to the police, the Government of Guatemala has so far not responded affirmatively.

The existence of urban terrorism and guerrilla activities will not in themselves cause the overthrow of the Peralta government if there is no major deterioration of the political and economic situation. Nevertheless, the evidence of increasingly coordinated efforts among the two extremist groups, and the increasing number of urban terrorist actions indicate that an effective organization is being created. Vigorous measures are required to reduce its potential for damage and to weaken its ability to seize on a deteriorating situation should one develop.

Action Recommendations

The Latin American Ad Hoc Inter-Agency Group on Counter-Insurgency has been reviewing in detail the situation described above. It has come to the obvious conclusion that one of the key impediments to the development of a counter-insurgency program in Guatemala is ineffective government leadership and the unwillingness of the Peralta government to make decisions involving the economic, political and social development of the country.

The actions set forth below, which the group has sent as an instruction to the Country Team,7 will be inhibited by this overriding problem. To the extent that the Country Team can move forward on such action, however, the following steps should be taken:

I. Political

Undertake to convince Peralta, other members of his government and responsible leaders of the moderate, nonextremist political parties that it is in Guatemalan interests for the government to press forward now with a broad range of programs directed towards national progress and development.
In low key, undertake in various ways, including direct personal conduct, to make known to Peralta the U.S. view that early [Page 188] return to constitutional government is essential and emphasizing the U.S. concern that failure to move in this direction enhances the possibility of subversion or civil war.
Encourage Peralta to permit all “middle-of-the-road” political parties to present candidates for the presidency.
Discreetly strengthen moderate political parties by all feasible means.
Discreetly support selected moderate politicians as a potential leadership resource in the event of a breakdown or sharp deterioration of the present situation.

II. Economic

Complete negotiations on outstanding AID loans as soon as possible waiving minor provisions which the present Government of Guatemala can use as an excuse for its inability to make decisions.
Consider the possibility of financing slum clearance and related projects in Guatemala City in an attempt to reduce the major subversion potential represented by urban discontent.
Explore the possibility of U.S. financing of additional mobile health units to be concentrated in guerrilla-threatened rural areas.
Consider the possibility of initiating community development programs, particularly in guerrilla-threatened areas.

III. Internal Defense

Continue to push for an expanded Public Safety program to enable the police to deal more effectively with insurgency problems, with primary emphasis on urban areas but also including rural activities.
Consider the creation of a special group within the police force to deal with counter-insurgency.
Urge that there be a clear definition of the roles of the police and military in counter-insurgency operations.
Examine the attitudes of the rural population toward Guatemalan security forces and the possibility of more effective training of such forces to improve civilian/security-forces relationships.
To the extent feasible, urge the expansion of civic action programs in threatened areas coordinating with AID programs which may be developed.
  1. Source: Johnson Library, National Security File, Country File, Latin America, Vol. III, 1/65–6/65. Secret.
  2. The President asked Mann on June 5 to set up a task force “to develop plans for what we do in Guatemala, Colombia and Bolivia.” “We should have a special task force on top of it with the best names,” Johnson said, “and be prepared in advance instead of waiting until they are shooting at us.” (Memorandum of conversation, June 5, 12:10 p.m.; ibid., Papers of Thomas C. Mann, Telephone Conversations with LBJ, May 2, 1965–June 2, 1966)
  3. Sayre returned to ARA in May 1965 after serving 1 year as the Latin American expert on the National Security Council staff.
  4. According to a June 22 memorandum from Vaughn to the Secretary, Bundy advised the Department on June 18 that the report on Guatemala would satisfy “current requirements provided biographic data were included.” Vaughn also wrote: “In general, Ambassador Bell regards the situation in Guatemala as reasonably satisfactory over the short term (the next two to three months). We are not as optimistic about Guatemala as the Ambassador, but we do not regard the situation so serious as to require contingency planning.” (National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23 GUAT) The Department officially forwarded the report to Bundy on June 18, noting that the biographical information would be sent at a later date. (Memorandum from Read to Bundy, June 18; ibid., POL 2 GUAT)
  5. According to The New York Times, June 3, Peralta said: “I will absolutely not be a candidate for the Presidency.”
  6. The initiative in this matter evidently came from Ambassador Bell, who urged the U.S. Government to move quickly against Alejos. (Telegram 965 from Guatemala City, May 27; National Archives and Records Administration, RG 59, Central Files 1964–66, POL GUAT)
  7. Airgram CA–12888 to Guatemala City, June 2. (Ibid., POL 23 GUAT)