Paraguay’s President Santiago Peña has been impeached and placed under house arrest following a national crisis triggered by the collapse of Ueno Bank.
Peña was arrested on Friday, minutes after lawmakers, including members of his own party, voted to remove him from office due to the financial disaster. While Peña had offered to step down on Thursday, lawmakers opted to impeach him and charge him with misconduct rather than accept his resignation. This move deliberately stripped him of his lifetime Senate seat and the immunity typically granted to former presidents. Peña, who held shares in the company that owned the bank until last year, has denied any wrongdoing.
The collapse of the digital bank has left more than half of Paraguay’s population without access to their savings. An estimated three million depositors remain unable to access their funds and pensions, prompting widespread protests, particularly in the capital, Asunción.
The impeachment charges alleged that Peña had conflicts of interest, manipulated regulatory oversight, diverted pension funds, and participated in an institutional cover-up involving the central bank.
Prosecutor Silvia Margarita Gonzalez Vester confirmed that Peña is due to be questioned on Saturday over allegations of breach of trust, influence peddling, and misappropriation of funds. The impeachment motion passed overwhelmingly with 44 out of 45 senators voting in favor, with one lawmaker absent.
Following the vote, Senate President Basilio Núñez announced that Peña was found guilty of “dereliction of duty.” Senator Rafael Filizzola added, “We are facing the biggest corruption scandal in our democratic history, a tremendous blow to the state, to private citizens, and to the country’s credibility and image.”
Vice-President Pedro Alliana was subsequently sworn in as interim President and will serve until 2028. Addressing the nation, Alliana promised, “Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated.”
Analysts suggest Peña is likely to face prosecution over the bank’s collapse. His defense lawyer, Ricardo Preda, has strongly rejected the charges, describing them as a “reckless accusation” that was “irresponsible and opportunistic.”
