A Banana Republic Once Again?

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(Part two of a two-part series)

In the first part of this series, the Center for Media and Democracy reported how the 2009 coup d'etat that toppled Honduran President Manuel Zelaya was successfully maintained not through the use of force, but through the power of lobbying and spin. That tale, whose details were revealed through Wikileaks' publication of diplomatic cables and research into lobbying activities, had some echoes of the role PR played in an earlier "regime change" in the region. Here is the story of how the Chiquita banana company successfully used PR spin to help topple Guatemala's left-leaning government in 1954, and how they may have done it again in Honduras, 2009.

The term "banana republic" was coined at the turn of the 20th Century in reference to the economic and political domination of weak or corrupt governments in Central America by the United Fruit Company, the corporation now known as Chiquita. (This article will refer to the company formerly known as United Fruit as "Chiquita"). Throughout much of its modern history, Honduras has been the quintessential "banana republic," a poor country ruled by a small group of wealthy elites, with national politics controlled by multinational business interests, particularly Chiquita. In fact, Chiquita has historically been known as "El Pulpo" ("The Octopus") in Honduras, as the company's tentacles had such a firm grip on Honduran national politics.

During the late 19th and early 20th centuries, Chiquita maintained its grasp on Central American politics with a range of illegitimate tools, including the use of mercenary force and bribes. Since the birth of modern public relations in the mid-20th century, though, Chiquita has successfully fought many of its battles for political control with the power of spin. Recent revelations suggest they have done the same in the case of Honduras in 2009.

Edward L. Bernays, Chiquita, and the CIA-backed Guatemalan Coup

Chiquita's most famous act of interference with Central American politics is its role in toppling Guatemala's left-leaning government in 1954. For the first half of the 20th century, Chiquita poured investment capital into Guatemala, buying the country's productive land and controlling shares in its railroad, electric utility, and telegraph industries; as a result, the Guatemalan government was subservient to Chiquita's interests, exempting the company from internal taxation and guaranteeing workers earned no more than fifty cents per day. At the time of the 1944 Guatemalan revolution, Chiquita was the country's number one landowner, employer, and exporter.

In 1950, Jacobo Arbenz Guzman was elected with 65% of the vote, and Chiquita perceived his agrarian land reforms as a threat to their corporate interests. Chiquita, with the help of the father of modern public relations, Edward L. Bernays, waged a propaganda war and managed to convince the American public and politicians that Arbenz was secretly a dangerous communist who could not be allowed to remain in power. With McCarthy-era hysteria in full swing, President Eisenhower secretly ordered the Central Intelligence Agency (CIA) to overthrow the democratically elected Arbenz in a 1954 covert operation. The CIA armed and trained an ad-hoc "Liberation Army" under the command of an exiled Guatemalan army officer, and used them in conjunction with a diplomatic, economic, and propaganda campaign. At the time, the American public was told that Guatemala was undergoing a "revolution;" the CIA's involvement was long suspected and fully revealed when the agency released thousands of documents in 1997. The overthrow precipitated a 40-year civil war that killed over 200,000 people, and "disappeared" another 100,000.

In the Bernays biography The Father of Spin, Larry Tye writes that Bernays began working as Chiquita's public relations counsel in the early 1940s, peddling bananas by claiming they cured celiac disease and were "good for the national defense" (the company had lent its ships to the U.S. military in WWII). As the Guatemalan government became concerned with the needs of its impoverished majority, Bernays began a PR blitz to spin the left-leaning government as covertly Communist. He urged Chiquita to find a top Latin American politician to condemn Guatemala's actions, and hire a top attorney to outline the reasons for outlawing the land reforms. Bernays planted stories in major newspapers and magazines on the "growing influence of Guatemala's Communists," prodded the New York Times to assign reporters who were sympathetic to his cause, and even managed to obtain coverage in liberal journals like The Nation. In 1952, Bernays brought a group of journalists to the region at Chiquita's expense to "gather information," but with everything the press saw and heard carefully staged and regulated by their host. When articles supportive of Chiquita's claims were printed, Bernays would offer to help distribute reprints of the article to top government officials and other writers, and to help get a Congressperson to reprint the article in the Congressional record. Bernays also set up a network of "intelligence agents" to "undertake a private intelligence survey" of the "political and ideological situation" in Guatemala, and fed reports from these phony agents to the press as warnings from an "authoritative source" or an "unnamed intelligence official." Throughout the conflict, Bernays remained a key source of information for the press. As the invasion began, he gave major U.S. news outlets the first reports on the situation.

One of Bernays' fellow PR men quoted in The Father of Spin notes that Chiquita's executives were initially unsupportive of Bernays' PR efforts, but not because they were uncomfortable with media manipulation; instead, "they wanted to do business the old way, to foment a revolution and get Arbenz the hell out of there." Bernays managed to convince Chiquita executives to take his more subtle and clever approach.

In addition to Bernays' carefully planned PR campaign, many indicators suggest Chiquita played a more direct role in convincing the U.S. to overthrow Arbenz. The company had very close ties to the CIA-- former Chiquita executive General Walter Bedell Smith, who was later named to the board of directors, was a former Director of Central Intelligence, and the Dulles brothers (Secretary of State John Foster Dulles and then-current Director of Central Intelligence Allen Welsh Dulles) had provided legal services to the company through their association with the New York-based law firm Sullivan & Cromwell. Notorious spymaster E. Howard Hunt, who headed the CIA's Guatemalan operation (and was later jailed for his role in the Watergate break-in) insisted in later years that lobbying by Chiquita persuaded the Eisenhower Administration to get involved in Guatemala.

Bernays' carefully planned campaign successfully created an atmosphere of fear and suspicion in the U.S. about the Guatemalan government, compelling a U.S. intervention that advanced Chiquita's interests and was internationally condemned. In turn, the overthrow fueled an atmosphere of fear and suspicion in Latin America about U.S. intentions in the region, and Che Guevara's wife Hilda Gadea later wrote "it was Guatemala which finally convinced [Guevara] of the necessity for armed struggle and for taking the initiative against imperialism." The U.S.-led regime change precipitated four decades of military rule and hundreds of thousands of deaths in Guatemala.

Chiquita's Role in Honduras, 2009?

When the Honduran military deposed President Manual Zelaya on June 28, 2009, many took it as an unfriendly reminder of the banana republic era. Chiquita remains a major presence in Honduras, and at the time, some questioned whether the fruit company played a role in backing the 2009 coup, as it did in 1954 in neighboring Guatemala. As the coup crisis progressed, though, Chiquita's name was hardly mentioned.

Elite business interests, including Chiquita as well as the Honduran manufacturing sector, were disturbed by Zelaya raising the minimum wage by sixty percent, so nobody was surprised that the country's business council CEAL (the Honduran equivalent to the U.S. Chamber of Commerce) wanted to spin the coup as constitutional, and to paint Zelaya as a Hugo Chavez-aligned would-be-dictator.

To push this message, CEAL hired Lanny Davis (and his associate, Eileen M. O'Connor) from the lobbying firm Orrick, Herrington & Sutcliffe, LLP. Their efforts were aided by the Honduran government hiring Bennett Ratcliff and the lobbying firm Chlopak, Leonard, Schechter and Associates. Davis was a longtime political insider described by the infamous G. Gordon Liddy as one who "can defend the indefensible." (Davis has most recently been in the headlines for serving as spinmeister for Ivory Coast leader Laurent Gbagbo, who refused to relinquish power after losing elections in November and has since been committing what the United Nations calls "massive violations" of human rights.) According to Robert White, former U.S. ambassador and current president of the DC-based Center for International Policy, "If you want to understand who the real power behind the [Honduran] coup is, you need to find out who's paying Lanny Davis."

While Chiquita was a member of CEAL, its role in supporting the post-coup PR blitz was never analyzed or discussed. The coup that ousted Zelaya clearly helped Chiquita's interests, but considering the company's history of interference in Latin American politics, it understandably kept a low profile during the crisis. Through its membership in CEAL, Chiquita's name never came up, and powerful lobbyists successfully attracted attention elsewhere.

The PR Machine At Work

The 2009 PR blitz was right out of Bernays' 1954 playbook. Davis worked with a former Honduran foreign minister and Supreme Court Justice Guillermo Pérez-Cadalso to prep him for testimony before the U.S. House Committee on Foreign Affairs; Davis also testified personally.

Right-wing Honduran legal "experts" made creative legal arguments about the legality of Zelaya's removal, which were then cited by an official government report. Honduras' lobbying firm appeared to help organize trips to the country for sympathetic legislators, briefed reporters on their interpretation of events, and placed op-eds in newspapers and magazines; Davis appeared personally on talk shows and drafted his own op-eds alleging the coup's constitutionality.

It is unclear how much money Chiquita provided to the Honduran equivalent of the U.S. Chamber of Commerce, CEAL, during the PR offensive supporting the coup. The company understandably wanted to maintain a public distance from the events in Honduras. While Lanny Davis carried out his PR blitz on behalf of CEAL and the coup, Chiquita also maintained its own lobbyists from McDermott, Will & Emory, paying the firm $140,000 in 2009. Chiquita has had a long relationship with McDermott, working with the lobbying firm since at least 1999. Because Chiquita is incorporated in the U.S., lobbying activities directly on its behalf are not reported. Throughout the course of the coup crisis, Chiquita and CEAL maintained separate lobbying firms and the banana company successfully managed to avoid accusations of meddling in Honduran politics.

By the fall of 2009, though, the Honduran coup had slipped from American headlines. So few noticed when Davis and O'Connor left Orrick, Herrington & Sutcliffe to join Chiquita's firm, McDermott, Will & Emory; CEAL also brought their business to McDermott.

With American news media focusing attention elsewhere, perhaps Chiquita no longer felt it necessary to maintain the appearance of separation from the coup supporters. The coup regime and its backers had successfully spun America into believing the coup was a constitutional response to an illegal power grab by a pro-Chavez president. Most who were following the story, including policymakers, had accepted Zelaya's removal as legal, and the "banana republic" allegations had faded from the limelight. However, with increasing political violence, oppression, and human rights violations at the hands of the right-wing post-coup government, and Chiquita's apparent connection to the coup supporters, perhaps Honduras really has become a banana republic once again.