Paraguayan president placed under house arrest after impeachment amid banking crisis
President Santiago Peña was put under house arrest minutes after Congress impeached him, as the suspension of Ueno Bank left about 60% of adults unable to access their accounts and sparked nationwide protests.
Paraguay’s right-wing president Santiago Peña was placed under house arrest shortly after Congress voted to impeach him, following the suspension of Ueno Bank that left roughly 2.9 million adults – about 60% of the adult population – unable to use their own money. The banking shutdown triggered protests across the country, some of which turned violent.
The impeachment process began on Wednesday and concluded on Friday, after which a public prosecutor ordered Peña’s detention. Prosecutor Elena Fiore Franco said, "It has been established that he is indeed inside his home. He voluntarily allowed officers to enter and made himself available for all procedural purposes."
Peña faces investigation for alleged illicit enrichment, money laundering and influence peddling linked to his alleged use of political influence to benefit Ueno, which expanded rapidly under his administration before being suspended for irregularities. The arrest warrant also names Carlos Carvallo Spalding, a former Ueno CEO who was appointed head of the central bank by Peña.
The former president, a close ally of U.S. President Donald Trump, attempted to resign on Thursday to retain the special jurisdiction granted to former presidents, who become senators for life in Paraguay, but lawmakers rejected the resignation, leaving him subject to ordinary courts. He posted on social media before the impeachment concluded, saying, "I say goodbye with gratitude, while fully recognising the anguish of those who are now waiting for answers."
Analysts note that Ueno’s rapid growth was aided by an easy account-opening system and promises of high returns, which attracted public pension funds. Political analyst Hugo Duarte said, "Because Ueno had the blessing of the presidency, most of the pension funds close to the government went to deposit their money in the bank," estimating $800 million to $860 million in state and pension funds were invested.
Retail sales fell sharply as consumers could not access cash, and opposition senator Rafael Filizzola described the scandal as "one of the biggest corruption scandals since the return of democracy" and "the biggest fraud carried out from political power in the democratic era."