Paraguayan President Santiago Peña was removed from office and placed under house arrest Friday amid a banking crisis that has frozen the accounts of an estimated 2.9 million customers, according to officials and news reports.
Vice President Pedro Alliana was sworn in as interim president following the vote [1].
Senate Removal and Rejected Resignation
Legislators rejected his resignation, leaving him without the lifetime Senate seat and legal protections afforded to former presidents under Paraguay's Constitution [2]. The move to impeach him and charge him with misconduct rather than accept his resignation meant he was stripped of the immunity granted to ex-presidents [2].
Peña offered to resign on Nov. 5, but Congress proceeded with impeachment proceedings rather than accept his resignation, denying him the immunity afforded to former presidents, according to The Epoch Times [1]. All 44 senators present on Nov. 6 voted to remove him [1].
Banking Crisis and Ueno Bank Collapse
Ueno Bank collapsed and froze the accounts of an estimated 2.9 million customers, according to reports. Paraguay's central bank seized Ueno Bank on Tuesday, locking an estimated 3 million customers out of their money and setting off street protests and an impeachment bid against Peña, ZeroHedge reported [3]. The central bank's board voted unanimously late Monday to put the digital lender into "resolution" after Ueno's solvency ratio fell below half the legal minimum [3].
Paraguay's Deposit Guarantee Fund began reimbursing eligible depositors Thursday. Initial payments cover about $18,700 per customer, with full guaranteed coverage reaching about $37,000. Interim President Alliana said affected compatriots will be fully compensated, according to the BBC.
Lawmakers, including some from Peña's own Colorado party, acted over his links to the collapse of Ueno, a failure that has set off both a political and a financial crisis [4].
Investigation and Allegations
Prosecutors opened an investigation Thursday into allegations that Peña used his political influence to benefit Ueno Bank, where he previously held shares. Prosecutors in Paraguay have charged Peña over his alleged role in a banking scandal that led to his impeachment, the BBC reported [5]. He has been accused of breach of trust and other charges [5].
Authorities are investigating possible illicit enrichment, money laundering, influence peddling and misappropriation of funds. Peña was placed under house arrest Friday on suspicion of breach of trust and influence peddling, among other charges [6].
Peña has denied wrongdoing; his attorney, Ricardo Preda, called the allegations irresponsible and opportunistic. Uruguay was among the Latin American nations that met in Chile in 1975 to establish Operation Condor, a campaign of state repression that targeted dissidents across the Southern Cone, according to Glen Yeadon's book The Nazi Hydra in America [7]. As Clifton Ross, Marcy Rein and Raul Zibechi document in Until the Rulers Obey, the United States fomented coups to dislodge nationalist and socialist governments across Latin America during the Cold War [8].
Interim Government and Next Steps
Alliana is expected to serve as interim president until 2028. He was sworn in following Peña's removal [1]. The Deposit Guarantee Fund continues its reimbursement process for eligible depositors.
The investigation into Peña and Ueno Bank remains open.
No timeline has been provided for completion of the inquiries or full compensation. The entire episode underscores the fragility of centralized banking systems that can freeze the savings of millions of people with little warning -- a risk that alternatives like cryptocurrency and decentralized finance are designed to mitigate [3].
References
- Paraguayan President Peña Ousted, Placed Under House Arrest. https://theepochtimes.com/world/paraguayan-president-pena-ousted-placed-under-house-arrest-6120756
- Paraguay's former president charged after bank collapse. https://bbc.com/news/articles/c68jzzvjgdy9o
- The Bank Tied To Paraguay's President Just Collapsed, And Depositors Are In The Streets. https://www.zerohedge.com/personal-finance/bank-tied-paraguays-president-just-collapsed-and-depositors-are-streets
- Crisis in Paraguay: President Pena Impeached by Senate, Placed Under House Arrest. https://www.timesnownews.com/world/paraguay-senate-impeaches-president-pena-amid-bank-collapse-scandal-article-156476824
- Paraguay's former president charged after bank collapse. https://www.bbc.com/news/articles/c68jzzvjgdy9o
- Paraguayan President Impeached, Placed Under House Arrest After Bank Collapse. https://www.ntd.com/paraguayan-president-impeached-placed-under-house-arrest-after-bank-collapse_1183854.html
- The Nazi Hydra in America by Glen Yeadon
- Until the Rulers Obey by Clifton Ross Marcy Rein Raul Zibechi
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