Jacobo Arbenz Guzmán was the democratically-elected, left-wing reformist President of Guatemala. Overthrown in a CIA-led coup, he was replaced by a military junta that proved to be one of the bloodiest in the region. Colonel Jacobo Arbenz Guzmán (September 14, 1913–January 27, 1971) was president of Guatemala from 1951 to 1954, when he was ousted in a coup d'état organized by the U.S. Central Intelligence Agency and was replaced by a military junta headed by Colonel Carlos Castillo Armas.
After his inauguration, Arbenz secretly met with members of the Communist Guatemalan Labor Party (PGT) in order to establish an effective land reform program. Such a program was proposed by Arbenz as a means of remedying the extremely unequal land distribution within the country; in 1945, it was estimated that 2% of the country's population controlled 72% of all arable land, but only 12% of it was being utilized.
While Arbenz's proposed agenda was welcomed by impoverished peasants who made up the majority of Guatemala's population, it provoked the ire of the upper landowning classes and factions of the military, who accused him of bowing to Communist influence. This tension resulted in noticeable civil unrest in the country.
This instability, combined with Arbenz's tolerance of PGT influence, caused the CIA to draw up a contingency plan entitled Operation PBFORTUNE in 1951. It outlined a method of ousting Arbenz if he were deemed a Communist threat in the hemisphere.
The United Fruit Company (UFC), a U.S.-based corporation, was also threatened by Arbenz's land reform initiative. The UFC was country's largest landowner and while it left much of its land unutilized, it had significant financial interests in Guatemala. According to international law, fair compensation must be given for nationalized foreign holdings. The company was paid $600,000 based on land values it had declared for tax purposes. The company found the amount insufficient.
In 1952 the Communist Guatemalan Labor Party was legalized; Communists subsequently gained considerable minority influence over important peasant organizations, labor unions, and the governing political party. The CIA, having drafted Operation PBFORTUNE, was already concerned about Arbenz's potential Communist ties, and the UFC lobbied the CIA and the Eisenhower administration to take action, raising similar concerns once its landholdings had been expropriated. In 1954, the administration decided to commission the CIA to sponsor a coup d'état, code-named Operation PBSUCCESS (changed from its earlier PBFORTUNE title) that toppled the government; Arbenz resigned on June 27, 1954 and was forced to flee. He initially sought exile in Cuba, lived for a time in Prague, and died in Mexico in 1971.
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