THE ALLIANCE FOR PROGRESS: ECONOMIC

WARFARE IN BRAZIL (1962-1964)

By John DeWitt*
INTRODUCTION
The Alliance for Progress was the crown jewel of President John F.
Kennedy's Latin American policy. Press releases and speeches trumpeted that
the Alliance would promote economic development and democratic
govemment. But fear of communism conquered programs ior democracy. The
conviction that Americans knew better than Brazilians what was best for Brazil
persuaded American policy makers to collaborate with civilian and military
conspirators to destroy the democratic, constitutional government of President
Joao "Jango" Goulart. A program designed to further development and
democracy was used as an economic warfare tool in the development of a coup
climate that led to a twenty-year military dictatorship.
ALLIANCE FOR PROGRESS TO PROMOTE DEVELOPMENT
AND DEMOCRACY
I

John Kennedy set up working group to develop what became known

as the Alliance for Progress before he was inaugurated. Adolf A. Berle,
Ambassador to Brazil under President Getulio Vargas and an old New Dealer
converted to Cold War warrior, was head of the Latin American Task Force.
Lincoln Gordon wrote the economic section of the report. Appointed
Ambassador to Brazil while Janio Quadros was still in office, Gordon arrived
in Brazil in October 1961 after Quadros had resigned and Joao Goulart became
president. His overseas postings with the Marshall Plan were in Paris and
London. He did not speak Portuguese or Spanish.
The drafting officer of the final document was Richard Goodwin. He
did not speak Portuguese or Spanish and had never been in Latin America
before March 1961. Goodwin became the White House expert on Latin
America. During a trip to Brazil in April 1961 in preparation for an Alliance
for Progress conference he (described the air of Rio de Janeiro as an
aphrodisiac, "its warm, odored moisture at once calming the mind and arousing
the flesh with promise of sexual pleasure." In Rio he had meetings with Latin
*Dr. DeWitt, now deceased, was an independent scholar who retired from the U.S.
Department of State and George Mason University.
Journal of Third World Studies, Vol. XXVI, No. 1
2009 by Association of Third World Studies, Inc.

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American economists, drank with journalists until after midnight "and enjoyed,
in the time remaining, the girls of Ipanema."'
Like the Truman Doctrine, containment policy and the Marshall Plan,
the Alliance for Progress was a program to combat the expansion of
international communism. The report sent to the president in early 1961
declared that the problem was to prevent capture of the "inevitable and
necessaryLatinAmericantransformation" by "Communist power politics." The
objective of the Communists was "to convert the Latin American social
revolution into a Marxist attack on the United States." The analysis warned that
the communist threat "is far more dangerous than the Nazi-Fascist threat of the
Franklin Roosevelt period and demands an even bolder and more imaginative
response."'^
Kennedy announced the Alliance for Progress in a 13 March 1961
speech to the Latin American Diplomatic Corps. He said "our aspiration for
economic progress can best be achieved by free men working within a
framework of democratic institutions" and asserted that "politicalfreedommust
accompany material progress ... we call for social change by free men." ' The
Charter of the Alliance signed at Punta del Este, Uruguay in August 1961
declared "The Alliance is established on the basic principle that free men
working through the institution of representative democracy can best satisfy
man's aspirations." "
JFK had a Janus-faced policy for the Western Hemisphere. A
grandiose plan to promote economic development and democracy was
announced with great enthusiasm. Hidden from public view was the
counterinsurgency program designed to prevent at all costs the expansion of
communist influence in Latin America. For example, Kennedy established
AID'S (Agency for International Development) Office of Public Safety (OPS)
in 1962. The CIA (Central Intelligence Agency) worked through OPS and in
six years it was a global anticommunist operation with an annual budget of $35
million and four hundred advisors assigned abroad. By 1971 the program had
trained over one million police officers in forty-seven countries, including
100,000 in Brazil.^
Kennedy aide Arthur Schlesinger, Jr. wrote, "The Alliance for
Progress represented the affirmative side of Kennedy's policy. The other side
was absolute determination to prevent any new state from going down the
Castro road and so giving the Soviet Union a second bridgehead in the
hemisphere."^ When he became president, Lyndon Johnson vowed to prevent
another communist state in Latin America. The Cuban missile crisis convinced
LBJ that "any man who permitted a second communist state to spring up in this
hemisphere would be impeached and ought to be."'
Senator J. William Fulbright, Chairman of the Senate Foreign

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Relations Committee, wrote in 1966 that the United States followed two
incompatible policies in Latin America: discriminating support for social
reform and undiscriminating anticommunism. The latter always received
priority, "often making us the friend of military dictatorships and reactionary
oligarchies." Suspicion of communist support was enough to discredit reform
movements and "to drive United States policy into the stifling embrace of the
generals and the oligarchs."^ Charges of communism killed debate. Jolin
Kenneth Galbraith said it was not as though policies were discussed and the
wrong choices made; the problem was that there was no debate at all because
of the prevailing anticommunist mood.'
THE BRAZILIAN NORTHEAST
The huge Brazilian Northeast seemed an ideal place to accomplish
Alliance for Progress objectives. It was a region making up about 20 percent
of Brazil with an area of 970,000 square miles. In the early 1960s the
population was about 22,000,000, the great majority li\'ing in misery and
economic deprivation. The estimated annual per capita income was less tlian
$100, less than one-third the national average.'"
Three agricultural zones comprise the Northeast. The zona de mata,
forest zone, along the coast is about eighty kilometers wide and extends from
southern Bahia to Natal in Rio Grande do Norte. The fertile alluvial soil in the
many river valleys along the coast proved ideal for sugar cane cultivation."
During the colonial era these valleys were staked out in huge plantations
worked by African slaves. Sugar production totally dominated land use. The
sertao, semiarid backlands, developed as a region of immense ranches that
supplied beef and draft animals to the coastal plantations. The agreste, the
transition zone between the humid coast and semiarid interior, was devoted to
subsistence farming, producing foodstuffs for the urban centers and plantations
along the coast.'^
During the colonial period the Northeast was the most prosperous and
productive area of the Portuguese empire. The region was the world's leading
sugar producing region for more than one hundred years. By the 1950s the
Northeast was the most backward, underdeveloped, impoverished area in
Brazil. Colonial legacies plagued the Northeast including an archaic land
ownership system, one of the most inequitable income disd'ibution patterns in
the world, and a social system that excluded most of the population from
political participation.

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BRAZILIAN GOVERNMENT PROJECTS TO

AID THE NORTHEAST
Brazilians know the Northeast as a region where droughts in the
sertao cause enormous hardships for poor agriculturists. Two of the worst
droughts occurred in 1877-79 and 1958. In the former about one-half of
Ceara's one million population died of starvation. In 1958 about 540,000
impoverished Northeastemers were put on the public payroll to prevent famine.
There was much out-migration to coastal cities and to the new capital, Brasilia,
where construction projects offered employment. Brasilia could not have been
completed rapidly without the work of the hardy candangos, destitute
Northeastemers who went to the new capital to escape the drought.'^
Brazilian government programs to alleviate suffering caused by the
droughts provided some emergency welfare assistance to the poor and a boon
to large landowners who benefited from the construction of reservoirs, roads
and irrigation systems. President Juscelino Kubitschek took the first steps to
provide long range solutions to Northeast problems.

CELSO FURTADO AND SUDENE

In May 1958 President Kubitschek asked Celso Furtado, a widely
respected economist of the National Bank for Economic Development
(BNDE), to develop legislation and a program for the Northeast. Bom in a
small town in the Northeast sertao, Furtado had a doctorate in economics from
the Sorbonne and did post graduate work at Cambridge. He had worked for
several years as an economist with the United Nations Commission for
Economic Development (ECLA) in Santiago, Chile.''' The bill creating
SUDENE (Superintendency for the Development of the Northeast) was signed
into law in December 1959. President Janio Quadros gave Furtado cabinet
rank, an appointment reconfirmed by President Joao Goulart following
Quadros' resignation. Getting congressional approval of a new development
agency proved much easier than obtainingfinancesfor SUDENE's master plan.
The Northeast's congressmen and public officials opposed an
autonomous agency directly subordinate to the president. Previous schemes to
assist the Northeast had established agencies that could be influenced by the
region's power brokers to use federal financial assistance for pet projects,
profit, patronage and pork. Those opposed to the SUDENE program "engaged
in character assassination of Furtado, whom they accused of a number of
crimes, such as being an economic theorist and a Communist." SUDENE's
enemies claimed the agency was infiltrated by communists who advocated
communist-inspired development projects.'' The law providing SUDENE
funding was finally approved in December 1961.
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PEASANT LEAGUES
In the Northeast in the middle of the twentieth century a few large
landowners lived lavishly while millions of poor farmers barely survived as
sharecroppers, wage laborers and squatters. In the mid-1950s rural workers
began organizing themselves to supply basic services that were unavailable
from their employers or public sources. These societies became known as
Ligas Camponesas (Peasant Leagues).
The primary goal of the first leagues was to provide decent burial
services for the destitute who by local custom were carried to a hole in the
ground in a false bottom coffin. The corpse was dumped into the grave and
covered with earth leaving the coffin intact and ready for reuse.'' The practice
produced the Northeast saying "Quem tempatrao, nao morrepagao," (If you
have a boss, you won't die a pagan.)
The number of leagues grew rapidly, concentrated in the sugar zone
along the coast, with a membership consisting primarily of sharecroppers and
tenant farmers on large plantations. In 1955 league leaders in Pemambuco
sought legal assistance from Francisco Juliao, a lawyer and state deputy
representing the PSB (Brazilian Socialist Party) because a plantation owner
was trying to evict one hundred and eighty league members. Juliao used his
association with the leagues as a trampoline to irther his own political
ambitions. He was elected federal deputy in the October 1962 elections.
By 1962 three groups were active in forming rural worker associations
- Juliao and his followers, communists, and the Catholic Church." The
Brazilian govemment began forming agricultural unions in 1963. The number
of rural unions recognized by the govemment grew from six in 1961 to 270 in
1963 with 557 applications for legal status pending approval. By the end of
1963 Juliao's leagues had been overtaken by Catholic Church and govemment
unions.'*
:
THE PEASANT LEAGUES: VANGUARD OF
COMMUNIST REVOLUTION?
The growth of organizations representing the rural poor was portrayed
as a threat to social, economic, and political structures that had existed for
centuries. Elites branded all peasant movements communistic and sought to
undermine their societies and destroy their influence by fair means and foul,
including well-funded propaganda campaigns and assassination of league
leaders. Scare stories were published in Brazil and the United States. In the
early 1960s the press and television introduced the Northeast to Americans as
an area with an impoverished population that was "perhaps in imminent danger
of a takeover by Castro-Communist-inspired peasant leagues."" Philip
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Sickman wrote in Fortune magazine that in late 1963 "In the destitute
Northeast, illiterate peasants were being organized with money from Red China
and arms smuggled in from Cuba."^
The oligarchs labeled Francisco Juliao a Northeast Fidel Castro who
wanted to establish a communist state. Anthony Leeds wrote that Juliao "is one
of several paternalistic representatives" of social movements of great
complexity "in a small part of the very large Northeast" which is a subordinate
part of multifaceted Brazil.^' According to Phillippe Schmitter, "the avalanche
of comment by both nationals and foreigners seems to have greatly
overestimated" the degree to which rural workers represented a threat to
existing economic and social structures.^^ Although Juliao's influence was
declining and his movement losing members to unions sponsored by the
Catholic Church and the govemment, the belief that his leagues were a serious
subversive threat remained strong.
THE UNITED STATES FEARS COMMUNISM
IN THE NORTHEAST
Among the reports that severely exaggerated the subversive potential
of the Peasant Leagues and Francisco Juliao were lurid articles published on
30 October and 1 November 1960 by New York Times Latin American expert
Tad Szulc. The first carried the front page headline "Northeast Brazil: Poverty
Breeds Threat of Revolt" and the second blared, "Marxists Are Organizing
Peasants in Brazil: Lefrist Leagues Aim at a Political Army 40 Million Strong."
Szulc said that organizers of communist-infiltrated leagues glorified
Fidel Castro and Mao Tsetung as heroes to be imitated and that the leagues
"appear to be the closest thing to a Fidelista movement in Latin America
outside Cuba." One of Juliao's key aides was quoted as saying to sharecroppers
that Cuba presented a model for change and "if we can't do it peacefully we'll
come here and ask you to grab weapons and make a revolution. The big
landowners backed by United States imperialism are sucking our blood."
Recife, the capital of Pemambuco, was "Long a Red Stronghold"
according to Szulc. He reported that Mayor Miguel Arraes was said to be a
communist and the city govemment had several communists in high positions.
A high municipal official in Recife told Szulc that "the Northeast will go
Communist and we'll have a situation ten times worse than in Cuba -- if
something is not done." The official added that "If the Brazilian Northeast is
lost to you Americans, the Cuban revolution will have been a picnic by
comparison.""
The national economy and the communist threat were the two main
issues in the nip and tuck 1960 presidential race between Richard Nixon and
John Kennedy. JFK attacked the Eisenhower-Nixon administration for being
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soft on Castro and letting a communist government come to power in Cuba

"only ninety miles from Mianii." Kennedy won the 8 November election with
49.7 percent of the popular vote to Nixon's 49.5 percent. The New York Times
was the most influential newspaper in the United States and Szulc was regarded
as an authority on Latin America. It is a sure bet that John Kennedy and the
New Frontiersmen were troubled by Szulc's reports.
Fears kindled by media reports were reinforced by CIA evaluations.
In an August 1961 National Intelligence Estimate the CIA reported that tlie
Communist Party and its pro-Castro allies could keep the Northeast in ferment.
The CIA warned that the 25,000 member Peasant Leagues led by procommunist, pro-Castro Francisco Juliao had become a powerfiil force for social
agitation."

PRESIDENT KENNEDY, CELSO FURT ADO AND SUDENE

On 14 July 1961 JFjK met in Washington with Celso Furtado to
discuss the SUDENE prograih. Arthur Schlesinger, Jr. wrote that during the
1950s the American Embassy regarded Furtado "with mistrust as a Marxist,
even possibly a Communist."" As a result of the meeting a United States
mission went to Brazil to consider Alliance for Progress assistance for the
Northeast. A positive finding led to an agreement signed by Foreign Minister
San Tiago Dantas and Secretary of State Dean Rusk during President Goul art's
April 1962 visit to Washington. The Northeast aid convention called for a $274
million program with the United States providing $131 million over four
years. ^'
The United States and Brazil had very different views on the roles to
be played by USAID and SUDENE, the number of Americans needed to staff
US AID and the purpose of the development program. President Goulart said
on 15 April that "SUDENE will have total autonomy in the distribution of
resources anticipated in the program of the Alliance for Progress to be
executed in the Northeast." Foreign Minister Dantas asserted "The program to
be executed is not a mixed program, Brazilian and North American, but only
Brazilian, elaborated and executed by our technicians. The financial measures
will originate simultaneously with the United States and Brazil.""
The United States refused to accept a subordinate role. USAID
negotiated agreements directly with state governments and other government
agencies. Albert Hirschman' wrote that the United States had "gross
overconfidence in its ability to solve other peoples' problems." Any "Journey
Toward Progress" is an immensely complex process with "roundabouts and
political implications - all matters of which the Washington architects of the
'Alliance for Progress' seemed completely unaware."^*
According to Peter Flynn, Americans thought they understood the
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Northeast better than Brazilians. A USAID director told him "we were in a
very serious political situation; we thought the Communists were going to run
all over the place. That was uppermost in our minds . . . Furtado said that
SUDENE only needed capital. They did not see their problems as clearly as we
thought we did."^'
By the end of 1962 USAID policy was to bypass SUDENE and work
directly with favored state governments. A memorandum from an Embassy
official presented USAID's strategy:
It seems to me that each of the nine governors [in the
Northeast] must be made to feel as sharply as possible that
he is competing to demonstrate to the U.S. that he is ready
and with better assurance of making good use of our money
than any of the other eight governors.'"
If state governors did not meet the standards of American functionaries,
USAID worked directly with local mayors. In June 1963 Pemambuco governor
Miguel Arraes complained that the Alliance for Progress was making deals
directly with mayors of his state.^'
There was strong disagreement about the number of American
personnel that should be assigned to the Northeast. Brazilians believed that a
small technical staff of four or five officers would suffice. From a small
consulate in the 1950s staffed by three Americans the post in Recife had been
upgraded to Consulate General by 1964 with a staff of seventy Americans,
including fifty-one with USAID and six with USIA (United States Information
Agency). Besides American personnel assigned to the Northeast on a
permanent basis many more officials arrived on the scene for temporary duty.
Celso Furtado said there were thousands of Americans in the Northeast in the
early 1960s."
Ambassador Merwin L.Bohan had been the United States
Commissioner on the Joint Brazil-U.S. Economic Development Commission
(1952-53). He recommended that seven or eight Alliance for Progress
technicians be sent to the Northeast "to work with the highly nationalistic
organization that was up there [SUDENB] . . . Within a year there were over
a hundred and fifty people in a small town in Northeast Brazil." Bohan
maintained that the value of the assistance program had been reduced "many,
many times by expansion, expansion, expansion" concluding that "the overall
program was ruined by bureaucracy.""
The United States and Brazil did not agree on the purpose of the
Northeast development program. USAID wanted short term impact projects for
political gain to eliminate the alleged communist menace. SUDENE wanted
long term projects designed to change the social and economic structures that
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I

retarded development and impoverished the people. The United States believed
that communist subversion was the biggest problem in the Northeast. Furtado
believed that ignorance, exploitation and hunger were the causes of Northeast
discontent. "Furtado saw thei Northeast as a national economic and social
problem. The United States viewed the region as an international security
problem."'" SUDENE objected to USAID's strategy "so undermining SUDENE
became one of the purposes of the [USAID] program."''
JFK sent his brother,iAttomey General Robert Kennedy, to Brazil in
December 1962 to have a "political confrontation" with President Goulart.
RFK told Jango that the United States was concerned about the increasing role
played by communists in government and requested that Celso Furtado be
removed as head of SUDENEl "Goulart's response was defensive, including a
denial that Furtado was a Communist, but said he was a poor executive and
would be out of SUDENE in January" according to Assistant Secretary of State
for Inter American Affairs Edwin Martin. When Foreign Minister San Tiago
Dantas arrived in Washington^ on 11 March 1963 to seek desperately needed
financial assistance, Martin wrote that Furtado was "still in charge [of
SUDENE] despite Goulart's promise to the Attorney General to replace him as
incompetent."''
Ambassador Gordon claimed that Goulart's word could not be trusted.
In 1973 he said that Jango "was like a cork bobbing in water. Goulart was
impressed by the latest argument he heard."" President Goulart may have told
RFK that he would replace Furtado when he had no intention of doing so. He
may have been so flabbergasted by the outrageous American request to
terminate the services of the man who had created and directed SUDENE since
its inauguration that he agreed to the proposal just to avoid giving offense to
the brother of President Kennedy who would soon receive a Brazilian
delegation requesting urgently needed economic assistance.'* Celso Furtado
remained head of SUDENE until fired after the April 1964 golpe de estado. He
was among the first to lose his political rights under the military dictatorship.
In 1965 he was appointed head of the economic development faculty of the
Sorbonne by President Charles DeGaulle. When democracy returned to Brazil
in 1985 he served as Ambassador to the European Economic Community and
Minister of Culture, among other assignments.
ATTEMPT TO INFLUENCE THE 1962 ELECTIONS
WITH AMERICAN FUNDS
United States interference in the October 1962 elections for
congressmen and state governors with Alliance for Progress funds subverted
the democratic process in an attempt to defeat candidates found undesirable by
United States functionaries. In February 1962 JFK wrote Fowler Hamilton,
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USAID Administrator, "I believe we should do something of a favorable nature

for Brazil before the election this fall, which is going to be crucial."'' Phyllis
Parker wrote that Kennedy's request was "an obvious attempt to assist
opponents of Miguel Arraes who was regarded by the United States as a
Communist." The State Department described Arraes as "the Commie-lining
Mayor of Recife."""
Hamilton responded to JFK's memo a week later saying that USAID
was about to conclude three important agreements in the Northeast. The first
was a $33 million "immediate impact loan-grant program," the second a $62
million long range development program and the third "a very substantial"
program for emergency food, wheat, com and dried milk (Public Law 480 Food for Peace). "We hope to initiate projects elsewhere in Brazil which will
have impact before October."'"
At a taped 30 July 1962 White House meeting major policy decisions
were made. It was decided President Goulart "was giving the country to the
Communists," the United States should "stiffen the spine" of the Brazilian
military, covert financial assistance should be provided the anti-Goulart
psychological warfare organization IPES (Institute for Research and Social
Studies) and covert funds should be provided anti-Goulart candidates in the
October 1962 elections. The only participants in this important meeting were
President Kennedy (Choate, Harvard), Lincoln Gordon (Harvard, Ph.D. in
economics from Oxford), National Security Adviser McGeorge Bundy
(Groton, Yale, at age 34, was named Dean of Harvard's Faculty of Arts and
Sciences)"^ and Deputy Assistant Secretary of State for Inter-American Affairs,
Richard Goodwin (first in his class at Harvard Law School where he was editor
of the Harvard Law Review\. No high-ranking official of the State Department
or authority with extensive experience in Brazil was present. If the New
Frontiersmen were the best and the brightest then these four men were among
the most brilliant of the best, the most dazzling of the brightest. Their
intellectual abilities, however, did not prevent them from making disastrous
errors in analysis of the complex currents and counter currents of politically
polarized Brazil in the 1960s.
Goodwin: I think the [ 1962] elections really could be a tuming point.
Line is analogizing to the Italian elections of'48.
JFK\ How much are we going to put in?
Gordon: Oh, this is a matter of a few million dollars, say (seven
seconds excised as classified information).
JFK: That's a lot of money. Because, you know, after all, for a
presidential campaign here you spend about 12. And our cost- so that I don't
think- that's 8 million dollars, would be an awful lot of money in an election.
Gordon: That's right.
JFK: (U'nclear)
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Gordon: It's an incrjsdibly complicated political scene JFK: Well, now, is it really being spent now? Are you going ahead
with it? (Thirty-nine seconds excised as classied information.)'"
When asked in a 1977 interview with the Brazilian newsmagazine
Veja how much American govemment money was used to support anti-Goulart
candidates in the 1962 elections, Gordon replied that he thought it was more
than one million dollars but less than five million. He said he might not have
been aware of all govemment funds involved because "as everyone knows" the
CIA used business ventures, some real and some merelyfronts,to conduct their
operations. When asked how the decision was made to give money to antiGoulart candidates, Gordon responded that "this was more or less a habit in
that period" adding that "the CIA was accustomed to have political funds"
since the 1948 Italian elections.""
USAID, SUDENE AND RIO GRANDE DO NORTE
Glaucio Ary Dillon Soares wrote that to comprehend Brazilian
politics, local politics must be understood. State and municipal issues and local
personalities are the most important factors."' Rio Grande do Norte provided
an excellent example of Gl^ucio's observation. This small, poor and
underdeveloped state with an economy based on agriculture is located on the
Atlantic coast in the Brazilian Northeast. Traditional clans like the Maia,
Alves, and Rosado families, the elites of Rio Grande do Norte, competed for
state political power.
Based in the city of Mossoro (the state's second largest city), where
all public buildings were painted pink (rosa), the Rosados had controlled the
mayor's office in every election except one since 1950 when the author visited
Rio Grande do Norte on a research field trip in the 1980s. Two powerful
families were linked near the end of the nineteenth century when Jernimo
Rosado married Isaura Maia. Jernimo was a great admirer of French culture
and he named his sons witli French numbers. The wide range ofhis offspring's
political and economic activities shows the influence of the Rosado-Maia
family: Dix-sept, former govemor; Dix-huit, former senator and mayor of
Mossoro; Dix-neuf, industrialist; Vingt, federal deputy; and Vingt-et-un, head
of the school of agriculture of" the state university.
Aluizio Alves was the most influential politician of another clan. He
had a close relationship with Carlos Lacerda, leader of tlie opposition UDN
(National Democratic Union), vociferous enemy of the Goulart govemment,
Guanabara govemor and confidant of Ambassador Lincoln Gordon. Lacerda
was the pit bull of Brazilian politics, a driving force in the destruction of the
presidencies of Getulio Vargas in 1954, Janio Quadros in 1961 and Joao
Goulart in 1964. Rio de Janeiro was the communications capital of Brazil and
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Lacerda was a spellbinding speaker on radio and television. His activities were
given wide coverage in major newspapers and his biting witticisms were prized
contributions to Rio's extensive and influential gossip network. Alves was
director of Lacerda's newspaper Tribuna da Jmprensa from 1949 to 1958,
including the period when Lacerda sought asylum in the Cuban Embassy
following his participation in the abortive coup to prevent Juscelino Kubitschek
and Joao Goulart from taking office in 1955.'"'
During the early 1960s Alves' political star was ascendant. Bom in
1921, he served as UDN federal deputy from 1946 to 1961. In his successful
1961 campaign for governor, Alves ran on the PSD (Social Democratic Party)
ticket supported by several minor parties, defeating the official UDN
candidates Djalma Marinho and Vingt Rosado. Alves conducted an active
campaign backed by publicity, songs, parades, and emotional speeches that
produced enough votes for victory. Walter Jose da Silva wrote that the
campaign allowed Alves to display all his talents as "a demagogic, populist and
opportunistic politician." ""
Aluizio Alves caught the fancy of Ambassador Lincoln Gordon.
During his 30 July 1962 meeting with President Kennedy the Ambassador told
JFK that the United States should move ahead with some AID projects in the
Northeast including Rio Grande do Norte. Gordon described RGN Governor
Aluizio Alves as a "hell of a good fellow... a 40-year old fellow, energetic as
can be, not a demagogue, honest." He added that "Alves wanted to organize a
strong center, slightly le of center, and we ought to support this absolutely to
the hilt.""'
In August 1962 a committee from USAID headquarters visited Rio
Grande do Norte. Before returning to the United States the delegation and the
Alves' government issued The Manifesto of Natal (RGN state capital) that
declared "We conclude that we are able to realize together a social and
economic development undertaking in Rio Grande do Norte within the spirit
of the Alliance of Progress.'"" The manifesto did not mention SUDENE or the
Northeast Development Master Plan. No SUDENE representative was present
during the negotiations between the USAID delegation and the Alves
government.
The United States blundered into Rio Grande do Norte like a blind ox.
American bureaucrats thought they knew more about Rio Grande do Norte than
Brazilian specialists in Northeast development working with SUDENE. Advice
and assistance from SUDENE was shunned because it was allegedly tainted by
communism. The Brazilian Northeast development organization was excluded
from project planning and oversight functions. The United States gave
bountiil support directly to Governor Alves who impressed Ambassador
Gordon as a "hell of a good fellow."

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Over the objections of SUDENE an education plan between USAID

and Rio Grande do Norte became effective at the end of 1962. Of the one
thousand classrooms planned for the project, forty-five new ones had been
constructed by April 1965 arid two hundred and forty-four existing ones had
been renovated. Progress in other areas of the education project was equally
unsatisfactory. The construction program ended in 1970.^"
All completed classrooms were located in the western part of the state
where Alves sought to bolster, his political support. "From the beginning of the
program, political misuse of USAID funds plagued the undertaking."^' In
Natal, a housing project built entirely with United States funds gave Alves
additional political clout. He "used his control of the social services apparatus
to dole out houses on the basis of political patronage," according to Brazilianist
Robert Levine."
Alves was governor; 1961-1966, and returned to Brasilia as federal
deputy for ARENA (the government political party established following
Institutional Act Number 2) from 1967 to 1969. The military dictatorship
canceled Alves' political rights on 7 February 1969, allegedly for corruption,
under the terms of Institutional Act Number 5 of December 1968." The
political rights of Carlos Lacerda were voided under the provisions of the same
act.
Neither the Alliance for Progress nor the military changed state
politics in Rio Grande do Norte. Tarcisio Maia became governor in 1975. He
formed an agreement of "Political Peace" with Aluizio Alves, influential in
state politics even without political rights. Tarcisio's cousin, Lavoisier Maia
Sobrinho, became governor in 1979. In the direct elections for governor in
1982 Jose Agripino Maia, riephew of Lavoisier, defeated Aluizio Alves.
Eduardo de Souza Soares and Josefa Emilia de Macedo observed that in the
elections of 1986 the candidate supported by the Maia oligarchy was defeated
by the candidate backed by th Alves oligarchy thus ending twelve consecutive
years of state government doniinated by the
ALLIANCE FOR PROGRESS RESULTS
In 1961 the Latin American Task Force reported to President
Kennedy, "A 'father knows best' attitude has been the cause of much of the ill
will directed toward the United States in recent years."" Alliance for Progress
officials had this imperious attitude in spades. USAID's posture was that ofa
charitable father doling out rewards to obsequious youngsters deemed
deserving by American functionaries.
Riordan Roett concluded that "economic aid oi' the United States
counteracted Brazil's modernization efforts for the Northeast and contributed
to the retention of power by the traditional oligarchy. "" Celso Furtado declared
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JOURNAL OF THIRD WORLD STUDIES, SPRING 2009

that the fear of reform "brought panic to the dominant classes who appealed to
the armed forces to play the role of gendarme of the social status quo, whose
preservation demanded the elimination of formal democracy.""
UNITED STATES POLICY CONTRIBUTES TO
CREATION OF COUP CLIMATE
United States policy makers looked at Brazil through Cold War
lenses. They were terrified that the moderately reformist President Goulart
would lead Brazil to a communist dictatorship. There was no ringing
pronouncement similar to President Richard Nixon's orders to "make the
economy scream" as part of the program to destabilize Salvador Allende in
Chile.'* Economic warfare against Joao Goulart was slow strangulation.
Ambassador Lincoln Gordon claimed that "far from bringing
economic pressure to weaken the Goulart regime, our policy was to sustain
economic assistance where it could be effective."^' The Ambassador's
statement would be laughable if the results of American policies had not been
so tragic for Brazil. Jan Knippers Black wrote:
By mid-1963 the U.S. effort to undermine Goulart had been
formalized in an approach called "islands of administrative
sanity," a phrase originated by Lincoln Gordon. Under this
policy, aid to the central government was suspended, while
more than $100 million was committed to state governors
who were pro-U.S. and anti-Goulart [including Lacerda and
Alves] . . . The public safety assistance program [training
police officers to control demonstrations by alleged
subversives] was geared at that time to the "islands of
administrative sanity" policy; most of the policemen trained
in 1963 were from the states of Minas Gerais, Guanabara
and Sao Paulo [states with anti-Goulart governors].'"

FOREIGN FUNDS AVAILABLE FOR GOULART

ENEMY LACERDA
While President Goulart was being overwhelmed by enormous
economic problems his most vehement enemy, Guanabara governor Carlos
Lacerda, was inaugurating projects with great fanfare that were funded lavishly
by foreign sources. Lacerda received two loans firom the Interamerican
Development Bank (IADB) to construct hospitals, improve water supply and
quality and to expand the sewage system." These were 30 year loans, with
interest of 2.75 percent (loans from die Brazilian Caixa Econmica were at 16
70

John DeWittATie Alliance for Progress: Economic Warfare in Brazil (1962-1964)

percent interest). Lacerda made speeches praising the Alliance for Progress
when he got funding from USAID to build five public markets in poor areas of
the city. Donations of Food for Peace money were used for schools and low
cost housing. A slum resettlement project was funded with a $2 million (1
billion cruzeiros) donation to the Guanabara affiliated Fundacao Leao XIII in
June 1962 by USAID using counterpart funds obtained from Food for Peace
(Public Law 480) wheat sales| to Brazil."
I

CONCLUSIONS
Two factors converted the Alliance for Progressfi-oma program for
development and democracy to an economic warfare weapon used to
destabilize the democratic govemment of Joao Goulart. The first was the
anticommunist fervor, at times bordering on hysteria, which gripped the United
States in the early 1960s. American policy makers were so afi-aid of appearing
"soft on Communism" they conspired with right-wing civilian and military
groups against reform moveitients. The second destructive characteristic of
American policy making was the Gook Syndrome, a term coined by Peter
Wyden in describing the Bay of Pigs catastrophe. He attributed the disaster to
the arrogance of American policy makers. "They tend to underestimate grossly
the capabilities and determination of people who committed the sin of not
having been bom Americans, especially 'gooks' whose skins are less than
white.""

Arrogance was a cliaracteristics of Kennedy's New Frontiersmen.

Humility was in short supply. The embodiment of the New Frontier's "penchant
for toughness, grace, and brilliance was McGeorge Bundy," the president's
National Security Adviser.'" !Kai Bird wrote "What for some was Bundy's
arrogance appeared to Kennecly as simple balls. Kennedy respected balls." In
a Febmary 1965 interview, Stanley Hoffman told Bird that:
There was this sense of infallibility, which I must say is what
exasperated me about the Kennedy administration. 1 knew
many of these people. They were arrogant bastards... They
always knew what the interest of another country was much
better than the natives."^'
i

Ronning and Vannucci wrote that "quite clearly" Ambassador Gordon

believed that he knew better than Brazilian leaders what was best for the
people.'*
!
The deadly combination of fear driven anticommunism and a colossal
superiority complex led American policy makers to collaborate with
conspirators in the destruction of Brazilian democracy.
71

JOURNAL OF THIRD WORLD STUDIES, SPRING 2009

END NOTES
FRUS - Foreign Relations of the United States, Govemment Printing Office,
Washington, DC
NARA - National Archives, Washington, DC
FOIA - Document obtained under the Fredom of Information Act
NOTES
1.

2.

3.
4.
5.

6.
7.
8.
9.
10.
11.

12.

13.

Richard N. Goodwin, Remembering America: A Voice from the

Sixties (Boston: Little, Brown and Company, 1988), p. 139, p. 162,
pp. 178-179.
Arthur M. Schlesinger, Jr., A Thousand Days: John F. Kennedy in the
White House (Greenwich, Connecticut: Fawcett Publications, 1965),
pp. 184-185.
Edwin McCammon Martin, Kennedy and Latin America (Lanham,
MD: University Press of America, 1994), pp. 52-54.
//i/.,p. 52,p. 59,p. 63.
Alfred W. McCoy, A Question of Torture: CIA Interrogation, from
the Cold War to the War on Terror (New York: Metropolitan Books,
2006), p. 60.
Schlesinger, A Thousand Days, p. 712.
Eric F. Goldman, The Tragedy ofLyndon Johnson (New York: Dell
Publishers, 1969), p. 451.
J. William Fulbright, The Arrogance of Power (New York: Random
house, 1966), p. 83.
John Kenneth Galbraith, A Life in Our Times (Boston: Houghton
Mifflin company, 1981), p. 359.
FOIA - CIA Current Intelligence Weekly Summary, 1 June 1962, p.
5.
Merilee S. Grindle, State and Countryside: Development Policy and
Agrarian Politics in Latin America (Baltimore: Johns Hopkins
University Press, 1986), pp. 28-30.
John DeWitt, "Sugar Cane Cultivation and Rural Misery in Northeast
Brazil," Journal ofCultural Geography (9), Spring/Summer 1989, p.
33.
Albert O. Hirschman, Journeys Toward Progress: Studies of
Economic Policy Making in Latin
& Company, 1963), p. 22, p. 68.

72

John DeWitt/The Alliance for Progress: Economic Warfare in Brazil (1962-1964)

14.

15.
16.

17.

18.

19.
20.
21.

22.
23.

24.

25.

26.
27.
28.
29.
30.

Albert Hirschman dedicated his classic book on economic

development in Latin America to Celso Furtado and Colombia's
Carlos Lleras Restrepo.Hirschman,yoMre;;5 Toward Progress, p. iv.
ic/., pp. 82-90.
'
R.S. Rose, One of the Forgotten Things: Getulio Vargas and
Brazilian Social Control, 1930-1954 (Westport, CN: Greenwood
Press, 2000), p. 14. ,
Rowan Ireland, "The Catholic Church and Social Change in Brazil:
An Evaluation" in - Riordan Roett (ed.), Brazil in the Sixties
(Nashville: Vanderbjlt University Press, 1972), pp. 357-359.
Boris Fausto, A Concise History of Brazil (Cambridge: Cambridge
University Press, 1999), 259-60; Anthony W. Pereira, The End of the
Peasantry: Rural Labor in Northeast Brazil (Pittsburgh: University
of Pittsburgh Press, 1997), pp. 31-33.
Hirschman, Journeys Toward Progress, p. 1L
Phillip Sickman, "When Executives Turned Revolutionaries,"
Fortune (70), September 1964, p. 214.
Anthony Leeds, "Northeast Brazil: Poverty Breeds Threat of Revolt"
in Joseph Maier and Richard W. Weatherhead, Politics of Change in
Latin America (New,York: Praeger, 1964), pp. 194-195.
Phillipe C. Schmitter I Interest Conflict and Political Change in Brazil
(Stanford: Stanford University Press, 1971), p. 209.
Tad Szulc, "Northeast Brazil: Poverty Breeds Threat of Revolt, " New
York Times 31 October 1960,1 ; Tad Szulc, "Marxists are Organizing
Peasants in Brazil: Leftist Leagues Aim at Political Army 40 Million
Strong," New York_fimes, 1 November 1960, p. 3.
FRUS 1961-1963 (vol. XII), American Republics, National
Intelligence Estimate of 8 August 1961 (NIE 93-61), Subject: "The
Outlook for Brazil," p. 443.
Schlesinger, A Thousand Days, 172; FRUS 1961-1963, (vol. XII),
American Republics, "Memorandum of Conversation: Subject: Celso
Furtado Call on the I^resident, 14 July 1961," pp. 439-441.
Moniz Bandeira, Presecnca dos Estados Unidos no Brasil (Rio de
Janeiro: Civilizacao Brasileira, 1973), p. 424.
Riordan Roett, The Politics ofForeign Aid in the Brazilian Northeast
(Nashville: Vanderbilt University Press, 1972), p. 85, p. 91.
Hirschman, Journeys Toward Progress, p. vi.
Peter Flynn, Brazil: A Political Analysis (Boulder: Westview Press,
1978), pp. 276-277.
Jan Knippers Black, United States Penetration of Brazil
(Philadelphia: University of Pennsylvania Press, 1977), p. 131.
I
I
I

73

JOURNAL OF THIRD WORLD STUDffiS, SPRING 2009

31.

32.
33.

34.
35.

36.
37.
38.

39.
40.
41.

42.

43.

Carlos Castello Branco, Introducao a Revolucao de 1964: Agonia de

Poder Civil (vol. I), (Rio de Janeiro: Editora Artenova, S.A., 1975)
I, p. 193.
Black, United States Penetration of Brazil, p. 131.
"Oral History Interview with Merwin L.Bohan," 15 June 1974,Harry
S. Truman Library, Independence, MO, 79-80. Bohan was a career
Foreign Service officer whose assignments included Counselor of
Embassy for Economic Affairs, Mexico City (1945-49) and
Ambassador to the Inter American Economic and Social Council.
Roett, The Politics of Foreign Aid,70, pp. 91 -93.
Jan Knippers Black, "Lincoln Gordon and Brazil's Military
Counterrevolution" in C. Neale Ronning and Albert P. Vannucci
(eds.). Ambassadors in Foreign Policy: The Influence of Individuals
on U.S.-Latin American Policy (New York: Praeger, 1987), p.lOl;
Fabio Sa Earp and Luiz Carlos Delorme Prado, "Celso Furtado" in
Jorge Ferreira and Daniel Aarao Reis, Nacionalismo e reformismo
social, 1945-1964 (Rio de Janeiro: Civiliazacao Brasileira, 2007),
pp. 392-393.
Martin, Kennedy and Latin America, pp. 302-305, p. 396 note 66.
Phyllis R. Parker, Brazil and the Quiet Intervention, 1964 (Austin:
University of Texas Press, 1979), p. 56.
Politicians are characteristically courteous with visitors, wrote
Elizabeth Drew. They often respond to requests for specifications in
vague terms that the visitors interpret as ironclad commitments. The
politician wants no confrontations or visitors departing in anger.
Elizabeth Drew, On the Edge: The Clinton Presidency (New York:
Simon & Schuster, 1994), p. 204.
NARA President John F. Kennedy to Fowler Hamilton, 2 February
1962, Box 112, Brazil, Security.
Parker, Brazil and the Quiet Intervention, p. 26, p. 94.
FRUS American Republics, 1961-1962, (vol. XII) "Memorandum
from the Administrator of the Agency for International Development
to President Kennedy," 9 February, 1962, pp. 455-456.
Kai Bird wrote that a Groton education produced a "myopia to
anything outside the Anglophile world" and produced in its graduates
an "ill-fated marriage" of "intellectual self-assurance and
condescension toward other cultures." Kai Bird, The Color of Truth:
McGeorge Bundy and William Bundy: Brothers in Arms, A
Biography (New York: Simon & Schuster, 1998), p. 53, p. 190.
Timothy Naflali (ed.). The Presidential Recordings - John F.
Kennedy: The Great Crises, 30 July-August 1962 (New York: W.W.
Norton, 2001),I, pp. 16-17; Robert Dallek, An Unfinished Life: John
74

John DeWitt/The Alliance for Progress: Economic Warfans in Brazil (1962-1964)

j

44.

45.
46.
47.

48.
49.
50.
51.
52.
53.
54.

55.
56.
57.

58.

F. Kennedy, 1917-1963 (New York: Little, Brown and Company,

2003), p. 521.
I
Roberto Garcia, "Entrevista Lincoln Gordon: Castello perdeu a
batalha: A presenca da Embaixada American na deposicao de Joao
Goulart em abril de 1964," Veja 9 March 1977,2-8. In Paris Lincoln
Gordon was an economic expert on Governor Averell Harriman's
Marshall Plan staff. 'The CIA fmanced anti-Communist labor and
electoral activities in France and Italy with Marshall Plan counterpart
funds, about $200 million a year. The Governor enthusiastically
supported the CIA's propaganda and psychological warfare
operations. The CIA claimed an important victory in the 1948 Italian
elections when the Christian Democrats defeated tlie Communists and
their allies. Frances Stoner Saunders, The Cultural Cold War: The
CIA and the World of Arts and Letters (New York: The New Press,
1999), pp. 107-109. !
Glaucio Ary Dillon i Soares, Sociedade e politica no Brasil (Sao
Paulo: Diflisao Europeia do Livro, 1975), p. 12.
John W.F. Dulles, Unrest in Brazil: Political-Military Crises, 19551964 (Austin: University of Texas Press, 1970), ]). 259, p. 290.
Walter Jose da Silva, "Articulacoes politicas para Aluizio Alves
ganhar a cena," Historia do Rio Grande do Norte n@ Web
(www.seol.com.br/rnnaweb/historia/republica).
Naftali (ed.). The Presidential Recordings, p. 12, p. 15.
Roett, The Politics of Foreign Aid, p. 111.
Black, United States,Penetration of Brazil, p. 131.
Roett, The Politics of Foreign Aid, pp. 122-123.
Robert M. Levine, Brazilian Legacies (Armonk, NY: M.E. Sharpe,
1997), pp. 49-50. '
"Aluizio Alves," Dicionario Historico-Biografico Brasileiro, 19301983 (Rio de Janeiro: Fundacao Gettilio Vargas, 1984), I, pp. 95-96.
Eduardo de Souza Soares and Josefa Emilia de Macedo, "A
Rearticulacao Oligrquica: A Terceira Via dos Maias (de Cortez
Pereira a Jose Agripino)" in Historia do Rio Grande do Norte n@
Web (www.seol.com.br/mnaweb/historia/republica).
Goodwin, Remembering America, p. 167.
Roett, The Politics of Foreign Aid, pp. ix-xi, p. 170.
Celso Furtado, "Brasil: Da repblica oligrquica ao estado militar" in
Celso Furtado et al, Brasil: Tempos modernos (Rio de Janeiro:
Editora Paz e Terra, 1968), p. 12.
David AtleePhillips,T/eMg/i/ Watch (New York: Atheneum, 1977),
p. 221 ; Christopher Hitchens, The Trial of Henry Kissinger (Lonon:
Verso, 2001), p. 56.1
75

JOURNAL OF THIRD WORLD STUDIES, SPRING 2009

59.
60.
61.

62.

63.
64.
65.
66.

Lincoln Gordon, Brazil's Second Chance En Route to the First World

(Washington, D.C: Brookings Institution press, 2001), p. 64.
Black, "Lincoln Gordon and Brazil's Military Counterrevolution," p.
101.
Mario Victor, Cinco anos que abalaram o Brasil: de Janio Quadros
ao Marchal Castello Branco (Rio de Janeiro: Editora Civilizacao
Brasileira, 1965), pp. 479-482.
John W.F. Dulles, Carlos Lacerda, Brazilian Crusader: The Years
1960-1977 (Austin: University of Texas Press, 1996), II, pp. 93-94,
p. 101; Mauricio Dominguez Perez, Lacerda na Guanabara (Rio de
Janeiro: Odisseia Editorial, 2007), pp. 119-125.
Peter Wyden, Bay ofPigs: The Untold Story (New York: Simon and
Schuster, 1979), p. 326.
Leebaert, The Fifty Year Wound, p. 263.
Bird, The Color of Truth: McGeorge Bundy and William Bundy, p.
190, p. 442 note 16.
C. Neale Ronning and Albert P. Vannucci, "Ambassadors in Foreign
Policy" in C. Neale Ronning and Albert P. Vannucci (eds.).
Ambassadors in Foreign Policy: The Influence of Individuals on
U.S.-Latin American Policy (New York: Praeger, 1987), p. 139.

76