The Cuban Revolution gained victory on
January 1, 1959, and Urrutia returned from a spell exiled in
Venezuela to take up residence in the
presidential palace. Urrutia's new revolutionary government consisted largely of Cuban political veterans and pro-business liberals including
José Miró, who was appointed as Urrutia's
prime minister.
Once in power, Urrutia swiftly began a program of closing all
brothels, gambling outlets and the national
lottery, arguing that these had long been a corrupting influence on the state. The measures drew immediate resistance from the large associated workforce. The dissapproving Castro, then commander of Cuba's new armed forces, intervened to request a stay of execution until alternative employment could be found.
Disagreements also arose in the new government concerning pay cuts which were imposed on all public officials on Castro's demand. The disputed cuts included a reduction of the $100,000 a year presidential salary Urrutia had inherited from Batista. By February Castro had assumed the role of prime minister following the surprise resignation of Miró, strengthening his power and rendering Urrutia increasingly a figurehead president. As Urrutia's participation in the legislative process declined, other unresolved disputes between the two leaders continued to fester. Utturia's belief in the restoration of elections was rejected by Castro, who felt that they would usher in a return to the old discredited system of corrupt parties and fraudulent balloting which marked the Batista era.
Urrutia was then accused by the
Avance newspaper of buying a luxury villa, which was portrayed as a frivolous betrayal of the revolution and led to an outcry from the general public. Urrutia denied the allegation issuing a writ against the newspaper in response. The story further increased tensions between the various factions in the government, though Urrutia asserted publicly that he had "absolutely no disagreements" with
Fidel Castro. Urrutia attempted to distance the Cuban government (including Castro) from the growing influence of the
Communists within the administration, making a series of critical public comments against the latter group. Whilst Castro had not openly declared any affiliation with the Cuban communists, Urrutia had been a declared
anti-Communist since they had refused to support the insurrection against Batista, stating in an interview, "If the Cuban people had heeded those words, we would still have Batista with us ... and all those other war criminals who are now running away".