10: Defense Department Troubleshooting

While sensitive talks were going on in India, a background check on William Douglas Pawley (EE-7144-A) was requested on October 3, 1951 which circulated for months before he could serve as special assistant to Secretary of Defense Robert Lovett who had replaced George C. Marshall the month before. Those queried included the Federal Bureau of Investigation, Office of Naval Intelligence, State Department, Central Intelligence Agency, House Committee on Un-American Activities, CSC (possibly Civil Service Commission), OSI (Office of Scientific Intelligence), and ASCI (U.S. Army’s Assistant Chief of Staff for Intelligence).1

On January 24, 1952, one of the security checks “by the Bureau of Internal Revenue in 1944-45” revealed some derogatory information from Pawley’s days in India building planes for China. Multiple people described Pawley “as a ‘shady, slick, business operator’” who “was considered by several representatives of the British-Indian Government and the U.S. Consulate, Madras, India, as having a questionable reputation and was also considered dishonest by some of his previous associates.” Significant among them was his early Flying Tiger partner. “General Chennault who was one of the individuals contacted during investigation stated that he regarded Subject’s record in India and China as questionable and stated that Subject was ‘involved in attempted bribery’.”

Pawley however was not considered “disloyal by any of the persons contacted” so the State Department name check “was returned with a notation that the subject’s investigative file could not be made available for review. In the absence of any derogatory information as to Subject’s loyalty, and in view of Subject’s prominence in the United States, it is felt that he should be placed in the Approved/Caution category.”2

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11: Going Bananas in Guatemala 1954

As George C. Marshall was being honored for the Marshall Plan designed to spur a peaceful economic recovery in Europe, his friend William Pawley was becoming involved in more hostile activities. In response to Guatemalan President Jacobo Arbenz Guzman calling for agrarian reform that would impact profits of United Fruit and coffee growers, the CIA drew up a contingency plan to overthrow him. CIA Director Allen Dulles wanted “a coordinated effort in the political field.” Dulles felt that “the exact steps which might be politically feasible are matters beyond our competence here” nonetheless “we have a legitimate interest, it seems to me, in seeing that the climate is right for the types of action in which we may be engaged.”

Secretary of State John Foster Dulles suggested  to President Eisenhower “sending a two-fisted guy to the general area on a trip of inspection and to report to the President.” Who did he have in mind? “Bill Pawley or someone of his type might be considered. I recognize that Pawley is hard to control, but he is fearless and gets things done even though he may break a little crockery in doing it. I would suggest that he might also spend a little time in the countries bordering on one of our chief concern.”1

Prior to Dulles envisioning Pawley’s new role, covert “Security Clearance” had been requested by the CIA’s Branch 4 of the Western Hemisphere (WH-IV aka WH/4)—the Caribbean region—for Pawley to “be used in Project DTROBALO as a means of offering employment and resettlement to rehabilitated disposees [sic].” Pawley it was noted “has many contacts and business interests in Latin America which will be valuable in the resettlement phase of the Project. He is not to be used as a consultant. He will be used on a witting basis” and his cover story would be “Governmental” rather than “Commercial” or “Other.” 

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