Santiago Peña removed from office and detained in Paraguay over Ueno Bank scandal
Paraguay's Senate unanimously removed President Santiago Peña due to his links with the Ueno Bank fraud. He was detained and transferred to a military regiment.
Paraguay's Senate topples Peña following Ueno Bank collapse
According to laizquierdadiario.com.ve, former Paraguayan president Santiago Peña was detained at his residence and transferred to the Presidential Escort Regiment on Friday, hours after the Senate approved his removal by unanimous vote. The vote registered 44 votes in favour of the conviction, including all 25 senators from the ruling Colorado Party, with only one absence. Peña was to give a statement before investigating authorities on Saturday at 11 in the morning.
The crisis centres on the collapse of Ueno Bank, a digital financial institution that had grown rapidly since its transformation into a bank in late 2023. Sixty per cent of the country's adult population held an account at that institution, with around three million customers in a country of just over six million inhabitants. Paraguay's Central Bank intervened in the institution, controlled by the Vázquez Group, after detecting critical levels of solvency and loans granted to companies in the same group exceeding legal limits.
The intervention resulted in blocked branches, frozen withdrawals and inaccessible deposits, with characteristics of a corralito. The impact extended to funds from the Social Security Institute (IPS) and the National Electricity Administration (ANDE), directly hitting retirees' savings. More than three million savers were left without access to their money.
The scandal implicates Peña directly
The case goes beyond the financial sphere: Peña was a shareholder in the group that owned Ueno Bank and maintained commercial ties with the entity before assuming the presidency. That relationship was the focus of the political trial that the opposition promoted and which, initially, the Colorado Party bloc threatened to block.
The situation changed when Horacio Cartes, former president of Paraguay and leader of the Colorado Party, publicly expressed support for the political trial against Peña. The shift was not accidental: Peña had begun disputing his influence within the party and was progressively displacing him, something Cartes would not tolerate. His support for the removal process functioned as internal retaliation and ended up tipping the balance in the Senate. Paradoxically, it was also Cartes who pushed through Congress for the investigation into the bank's solvency.
Peña attempted a last-minute manoeuvre on Thursday by resigning from office, which would have allowed him to retain his seat as a senator for life and evade the political trial. The public quickly identified the manoeuvre. Faced with pressure from demonstrators, Congress rejected the resignation and continued with the process that culminated in his removal.
Alliana assumes the presidency under suspicion
Following the removal, a bicameral commission of Congress swore in Vice President Pedro Alliana as the new president of Paraguay. Alliana is also implicated in the Ueno Bank scandal, although the Colorado Party rejected the opposition's request on Thursday to initiate a political trial against him, shielding him politically.
As new vice president, the Senate appointed Antonio Barrios, another man from Cartes's circle, who until recently had described the political trial against Peña as "too much". The composition of the new government reflects that internal control of the Colorado Party remained in Cartes's hands throughout the crisis.
Celebrations and protests in the streets
The Senate vote was accompanied by massive mobilisation in the streets. Thousands of citizens, many of them savers and retirees affected by the fund freeze, expressed their fury outside Congress. After Peña's removal was confirmed, celebrations broke out among the demonstrators. Several also chanted slogans against the new president Alliana, making clear that Peña's departure does not close the political conflict.
The financial crisis that triggered the political process remains unresolved: millions of Paraguayan families remain without access to their savings, and the funds of social security organisations continue at risk whilst the new government—made up of figures equally implicated in the scandal—assumes power.
Source: Google News CL — Santiago