Paraguay Detains Oust President Over Ueno Bank Collapse
Santiago Peña faces up to 20 years in prison after lawmakers removed him from office amid a banking crisis that froze assets for millions of citizens.
By Hassan Ellis ·
Paraguayan prosecutors charged former President Santiago Peña on Saturday with breach of trust and administration for personal gain. The charges stem from the recent collapse of Ueno Bank, an event that has paralyzed the savings of hundreds of thousands of account holders. Nancy Salomón, the chief prosecutor for corruption and economic crimes, announced the move during a press conference in Asunción. She stated that Peña would now face a formal investigation for these two specific crimes.
The legal action followed a rapid political upheaval that began earlier in the week. On Thursday, Peña submitted his resignation to Congress. Lawmakers rejected the offer, arguing that accepting it would grant him immunity from prosecution. Instead, they moved forward with an impeachment trial. On Friday night, the Senate voted unanimously to remove him from office. Pedro Alliana, the vice president, immediately assumed the role of head of state and began selecting a new cabinet on Saturday.
The crisis was triggered by the financial failure of Ueno Bank. On Tuesday, regulators stepped in to intervene in the institution. They froze the accounts of nearly 3 million customers. This move sparked widespread anger and protests across the nation. Lawmakers accused Peña of using his political power to direct hundreds of millions of dollars in public funds into the bank. They also claimed that regulators ignored risky lending practices involving insiders. Peña has denied any wrongdoing in the matter.
Prosecutors ordered the arrest of Peña and former Central Bank chief Carlos Carvallo on Friday. The order was issued shortly after the Senate voted to oust the president. Late Friday, Peña was transferred to a military base while hundreds of protesters gathered outside his residence. On Saturday, Judge Humberto Otazu granted the request to keep Peña in custody during the investigation. The judge ruled that holding him at the base would guarantee his compliance with the anti-corruption probe. If convicted of both charges, Peña faces a prison sentence of up to 20 years.
Peña was questioned by prosecutors at the Attorney General's compound earlier on Saturday. Police escorted him into the building, though he was not wearing handcuffs. A small group of demonstrators waited outside to voice their frustration. They watched as he was driven out of the facility shortly after his arrival. Some of the protesters indicated they want the new president, who was a close ally of Peña, to face similar scrutiny. One demonstrator, Liliana Jara, argued that the former leadership was part of the same political clique.
The Central Bank provided updates on the financial fallout on Saturday. The institution reported that 1.2 million Ueno customers had received either partial or full reimbursement of their deposits. Under Paraguayan law, deposits up to 37,000 dollars are insured. The banking crisis has intensified public outrage, leading to clashes between protesters and police this week. Demonstrators have demanded access to their frozen savings and accountability for the bank's failure. Police responded with rubber bullets and pepper spray during these confrontations.
The political landscape in Paraguay has shifted sharply. The country returned to democratic rule in 1989 and has been governed mostly by the conservative Colorado Party since then. Peña was a member of that party. His removal marks the nation's biggest political crisis in a decade. In a farewell message released before his ouster, Peña wrote that he hoped his departure would spare the country further harm. He stated that his responsibility was to place the nation above his personal fate.
The new administration faces immediate challenges as it manages the aftermath of the banking failure. The largest teachers' union in the country, which includes more than 40,000 members, is set to begin an indefinite national strike on Monday. The union aims to press for the protection of public pension funds. This action adds another layer of pressure on the new government as it seeks to stabilize the economy and restore public confidence in financial institutions.
