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10 Great Moments in Corporate Malfeasance


8
United Fruit's Overthrow of the Guatemalan Government
When Guatemala took unused land from United Fruit for its own farmers, United Fruit had the CIA overthrow the government.
When Guatemala took unused land from United Fruit for its own farmers, United Fruit had the CIA overthrow the government.
©iStockphoto.com/Thinkstock

By the end of the 1940s, the American-owned United Fruit Company controlled 42 percent of the land in Guatemala and wasn't using much of it [source: Third World Traveler].

In the early 1950s, democratically elected Guatemalan president Jacobo Arbenz carried out a land reform package that included the forced purchase of idle land owned by the United Fruit Company and redistributing it to indigenous farmers. The company approached Allen Dulles, the former president of United Fruit in the 1930s who had become the director of the CIA, and offered to use their fruit transportation network to smuggle arms into the country to spark a rebel movement [source: Spartacus Educational].

Dulles, framing land redistribution as a patently communist act and a sign that Guatemala was courting the Soviets as patrons, sanctioned a CIA-backed overthrow of Arbenz, led by Guatemalan army officer Carlos Castillo Armas. The U.S. agreed to supply aircraft for the rebel army to bomb Guatemala City, set up propaganda outlets in Latin America, bribed Arbenz's military commanders into surrendering and pressured the American media not to report on the story.

In 1954, Arbenz resigned and was replaced by Castillo Armas, who outlawed political parties and shut down opposition media outlets. In 1960, a 36-year-long civil war began in Guatemala.