Paraguay Senate dismisses President Santiago Pena over bank crisis

The Senate voted overwhelmingly to remove Pena for misconduct in office. Although Pena had already resigned on Thursday, senators impeached and convicted him instead, stripping him of the lifetime Senate seat and immunity granted to former presidents, leaving him vulnerable to prosecution.

Bank Collapse Triggers Crisis

Pena's rapid downfall came amid mounting pressure over the collapse of digital lender Ueno, one of the country's biggest banks, with which he had ties. The bank's accounts are frozen, leaving millions of customers unable to access their money, including pension payments. Ueno also held hundreds of millions of dollars in public funds.

Impeachment Allegations

Thirty-five opposition lawmakers and ruling-party dissidents submitted impeachment articles, accusing Pena of conflicts of interest, misuse of pension funds and institutional cover-ups linked to Ueno. They cited two loans he received from Ueno and questioned his 2023 appointment of central bank chief Carvallo, who previously chaired Financiera Ueno.

The central bank approved Ueno's conversion into a bank just 83 days after Carvallo's appointment. IPS, which manages pension and health care funds, held $355 million at the bank—about 9% of its investments.

Aftermath and Investigations

Following the Senate vote, prosecutors ordered the arrest of Pena and former central bank chief Carvallo as part of a criminal investigation. Authorities have detained eight senior Ueno executives and charged 27 bank officials with offenses including breach of trust and attempted fraud.

Hundreds of Ueno employees protested demanding unpaid wages, while retirees, depositors and workers marched through Asuncion demanding Pena's impeachment. Pena had pledged legislation to return savers their money but canceled his attendance at the Ibero-American summit in Madrid.