Paraguay’s Santiago Peña under house arrest after Senate removes him over bank collapse
Paraguayan authorities placed ousted president Santiago Peña under house arrest on Friday, hours after the Senate removed him over the collapse of government-linked Ueno Bank, which locked nearly half of the country’s 6 million people out of their savings. All 44 senators present voted to strip him of office for misconduct, ending what had been seen as one of South America’s most stable presidencies and making him the second leader impeached since Gen. Alfredo Stroessner’s 35-year dictatorship ended in 1989. Peña had offered to resign, but lawmakers pressed ahead, ending his political immunity.
He must remain at a home in Asunción until he appears before prosecutors Saturday on charges including breach of trust, influence peddling and using public office for personal gain; the most serious carry up to 10 years in prison. Lawmakers accuse him of steering hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending. Crowds packed the plaza outside Congress chanting “Dictatorship never again!” Police later ringed the house as people kept vigil so he would not flee. Prosecutors also ordered the arrest of Carlos Carvallo, who ran the firm that became Ueno until Peña named him central bank chief in 2023; it was unclear whether he was in custody. Ueno founder and former CEO Miguel Vázquez is already held at Tacumbú prison, which protesters invoked as they demanded Peña’s jailing.
Vice President Pedro Alliana was sworn in Friday to serve until August 2028. He is himself under investigation over the bank and inherits pressure to restore frozen deposits. Regulators seized Ueno three days earlier: customers could not withdraw cash, use cards or reach savings. The digital lender had drawn more than a million first-time account holders with supermarket rebates and even sponsored the national soccer team, whose players say they cannot access their money after this year’s World Cup upset of Germany. A ride-hailing app that relied on Ueno shut down, leaving 3,000 drivers idle, and the state power company’s employee pension fund was among those exposed. Peña said he did not want his presence to deepen division and wrote that he left with gratitude while acknowledging the anguish of those still waiting for answers.
Continue in the app — vote & join in ➔