President Santiago Pena placed under house arrest after Senate impeachment
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Paraguay's Senate impeached President Santiago Pena after the collapse of Ueno Bank exposed a crisis that blocked ordinary people from their own savings, and he was placed under house arrest as prosecutors weigh charges.
Paraguay's Senate moved on Friday to impeach President Santiago Pena after a banking collapse that left millions of citizens stranded without access to their deposits. The impeachment opened the door for Vice President Pedro Alliana to take over the presidency for the rest of the term, which runs until August 2028.
Although Pena had resigned the day before, senators still chose to convict him, stripping him of the lifetime Senate seat and immunity that come with former presidents, and leaving him exposed to prosecution. Prosecutors then ordered his arrest together with former central bank chief Carlos Carvallo, and Pena was placed under house arrest while authorities decide on the final charges.
At the center of the scandal was Ueno, a digital lender that reached about 60% of Paraguay's adult population and held roughly $800 million in public-sector deposits, including pension and health-care funds. The bank's solvency dropped below regulatory requirements, forcing the central bank to launch a resolution process.
Lawmakers accused Pena of conflicts of interest, misuse of pension funds and interference with the Social Security Institute, pointing to his sale of shares in Ueno Holding and the two loans he received from the institution. They also emphasized his 2023 appointment of central bank chief Carlos Carvallo, who had previously chaired Financiera Ueno, shortly before approval of the bank's conversion.
Authorities have detained eight senior Ueno executives and charged 27 bank officials and associates with offenses including breach of trust and attempted fraud.
"We will return to every saver what they are entitled to as quickly as possible," Pena said in a video message meant to calm customers.
Protesters gathered outside Pena's residence in Asunción while police maintained a security cordon. The crisis also forced the cancellation of Pena's planned trip to the Ibero-American summit in Madrid.