Ousted Paraguayan President Santiago Peña was placed under house arrest Friday on suspicion of breach of trust and influence peddling, among other charges, shortly after the Senate removed him from office over the collapse of a government-linked bank that locked nearly half the country’s 6 million people out of their savings.
All 44 senators present voted to remove Peña for misconduct in office, making him the second Paraguayan president ousted by impeachment since the end of Alfredo Stroessner’s 35-year dictatorship in 1989.
As the verdict came down, ending what had been seen as one of South America’s most stable presidencies, a roar rose from the crowds packed into the plaza outside Congress. Depositors, retirees and students in national soccer jerseys waved Paraguayan flags, sang and hugged, chanting “Dictatorship never again!”
Regulators had seized Ueno Bank just three days earlier, sending shock waves through the financial system and setting off the country’s worst political crisis in more than a decade.
Peña was ordered to remain at one of his homes in Asunción until he appears before prosecutors Saturday morning on charges of breach of trust, influence peddling and using public office for personal gain, the most serious of which carry up to 10 years in prison. Lawmakers accuse him of using his political influence to steer hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending.
Peña has denied wrongdoing.
Police ringed the house Friday night as crowds gathered outside, waving flags and vowing to keep vigil until morning to make sure he didn’t escape.
Prosecutors also ordered the arrest of Carlos Carvallo, who ran the finance company that became Ueno until Peña named him central bank chief in 2023. It was not immediately clear whether Carvallo had been taken into custody.
Vice President Pedro Alliana was sworn in as president Friday to serve out the term, which ends in August 2028. “The Paraguay we receive today has urgent needs,” said Alliana, who is also under investigation in connection with the bank and inherits a government under pressure to return depositors’ money and punish those responsible.
In a farewell message before the verdict, Peña said that he did not want his “presence to be a cause of greater division or instability".
“I say goodbye with gratitude, without ignoring the anguish of those who are waiting for answers today,” he wrote.
Public outrage has become more thunderous by the day. As senators deliberated Friday, protesters demanding their frozen savings back and accountability for Ueno’s failure marched through downtown Asunción chanting, “Santi Peña to Tacumbú!” – a reference to the capital’s main prison, where Ueno’s founder and former CEO, Miguel Vázquez, is now being held.
“This was an enormous betrayal of trust,” said Yinal López, a worker at the state electricity company, whose employee pension fund also had money at Ueno. “The president has made a mockery of the people."
When regulators seized the bank, Ueno customers could no longer withdraw cash, access their savings or use their cards to buy anything. The digital lender had aggressively courted the poor and unbanked with generous supermarket rebates, and more than 1 million Paraguayans opened their first bank account there, according to Ueno. Even players on the national football team, which Ueno sponsored through its run to a World Cup upset of Germany this year, say they can’t reach their money.
All 44 senators present voted to remove Peña for misconduct in office, making him the second Paraguayan president ousted by impeachment since the end of Alfredo Stroessner’s 35-year dictatorship in 1989.
As the verdict came down, ending what had been seen as one of South America’s most stable presidencies, a roar rose from the crowds packed into the plaza outside Congress. Depositors, retirees and students in national soccer jerseys waved Paraguayan flags, sang and hugged, chanting “Dictatorship never again!”
Regulators had seized Ueno Bank just three days earlier, sending shock waves through the financial system and setting off the country’s worst political crisis in more than a decade.
Peña was ordered to remain at one of his homes in Asunción until he appears before prosecutors Saturday morning on charges of breach of trust, influence peddling and using public office for personal gain, the most serious of which carry up to 10 years in prison. Lawmakers accuse him of using his political influence to steer hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending.
Peña has denied wrongdoing.
Police ringed the house Friday night as crowds gathered outside, waving flags and vowing to keep vigil until morning to make sure he didn’t escape.
Prosecutors also ordered the arrest of Carlos Carvallo, who ran the finance company that became Ueno until Peña named him central bank chief in 2023. It was not immediately clear whether Carvallo had been taken into custody.
Vice President Pedro Alliana was sworn in as president Friday to serve out the term, which ends in August 2028. “The Paraguay we receive today has urgent needs,” said Alliana, who is also under investigation in connection with the bank and inherits a government under pressure to return depositors’ money and punish those responsible.
In a farewell message before the verdict, Peña said that he did not want his “presence to be a cause of greater division or instability".
“I say goodbye with gratitude, without ignoring the anguish of those who are waiting for answers today,” he wrote.
Public outrage has become more thunderous by the day. As senators deliberated Friday, protesters demanding their frozen savings back and accountability for Ueno’s failure marched through downtown Asunción chanting, “Santi Peña to Tacumbú!” – a reference to the capital’s main prison, where Ueno’s founder and former CEO, Miguel Vázquez, is now being held.
“This was an enormous betrayal of trust,” said Yinal López, a worker at the state electricity company, whose employee pension fund also had money at Ueno. “The president has made a mockery of the people."
When regulators seized the bank, Ueno customers could no longer withdraw cash, access their savings or use their cards to buy anything. The digital lender had aggressively courted the poor and unbanked with generous supermarket rebates, and more than 1 million Paraguayans opened their first bank account there, according to Ueno. Even players on the national football team, which Ueno sponsored through its run to a World Cup upset of Germany this year, say they can’t reach their money.
