Paraguay’s Senate has unanimously removed President Santiago Pena from office over the collapse of Ueno Bank, with prosecutors placing him under house arrest in Asuncion.
Vice-President Pedro Alliana was sworn in as president on Friday, November 6, and will serve the remainder of the five-year term, which runs until August 2028. Former health minister Antonio Barrios became vice-president.
All 44 senators present voted to convict Pena of misconduct in office, while one lawmaker was absent. The vote came a day after Congress rejected his resignation.
Impeachment, rather than resignation, also stripped the 47-year-old economist of the lifetime Senate seat and legal immunity normally granted to former Paraguayan presidents.
Police and prosecutors arrived at Pena’s residence minutes after the Senate decision to enforce the house arrest order. Prosecutor Elena Fiore Franco said he “voluntarily allowed officers to enter and made himself available for all procedural purposes”, The Guardian reported.
Alliana, a former Speaker of the Chamber of Deputies and a member of the ruling Colorado Party, pledged to compensate people affected by the financial crisis.
“Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated,” he said after taking office, promising “firmness against those who want to steal this future from them.”
Bank collapse triggers political crisis
Paraguay’s central bank seized Ueno Bank on Tuesday, November 3, after determining that its capital had fallen below half the legal minimum.
The collapse froze the savings and pensions of nearly three million people, equivalent to about 60 per cent of Paraguay’s adult population, and prompted nationwide street protests.
Lawmakers accused Pena of conflicts of interest, interference with regulatory oversight and directing hundreds of millions of dollars in public and pension funds to the digital lender. He held approximately US$1 million in shares in Ueno’s parent group until 2025.
Prosecutor Silvia Margarita Gonzalez Vester said Pena was due to be questioned on Saturday, November 7. He is suspected of breach of trust, influence peddling and misappropriation of public funds, offences that carry sentences of up to 10 years in prison, CBC News reported.
Prosecutors have also ordered the arrest of former Ueno chief executive Carlos Carvallo Spalding, whom Pena appointed as central bank governor in 2023. Ueno founder Miguel Vazquez is being held at Tacumbu prison in Asuncion.
Pena, formerly one of US President Donald Trump’s closest regional allies, has denied wrongdoing. His defence lawyer, Ricardo Preda, described the allegations as “irresponsible and opportunistic”.
Before the Senate verdict, Pena wrote on social media: “I say goodbye with gratitude, without ignoring the anguish of those who are waiting for answers today.”
