Paraguay Ousted President Santiago Pena Charged in Bank Scandal
Paraguayan state prosecutors filed criminal charges against former President Santiago Pena on Saturday following his legislative impeachment and detention over the collapse of Ueno Bank. Santiago Pena spent Saturday morning undergoing interrogation at the attorney general's headquarters in Asuncion before Nancy Salomon, the chief prosecutor for economic crimes, said he would be investigated for breach of trust and administration for personal gain. The criminal indictment follows the impeachment of the head of state on Friday, when senators voted 44 to 1 out of 45 lawmakers to remove him from the presidency. Lawmakers rejected Santiago Pena's earlier resignation offer specifically to strip him of the legal immunity traditionally granted to former national presidents. Police authorities detained Santiago Pena minutes after his removal from office, placing him under house arrest while prosecutors petition the judiciary for formal pretrial detention.
Impeachment and Criminal Charges in Asuncion
The financial controversy centers on Santiago Pena's personal and political ties to Ueno Bank, a digital banking institution that expanded rapidly during his presidential administration. Investigators allege that Santiago Pena steered upwards of 800 million dollars in public funds into the institution while shielding its operations from regulatory scrutiny. Specific accusations include authorizing the national state pension fund to deposit 355 million dollars into Ueno Bank in direct violation of statutory limits. Prosecutors also charged former central bank president Carlos Carvallo, who previously served as an executive at Ueno's predecessor entity, with breach of trust and falsification of public documents. Santiago Pena held an equity stake in Ueno Bank's parent entity until March 2025 but has maintained his innocence, claiming that the institution's insolvency stemmed from routine regulatory interventions.
Ueno Bank Solvency Crisis and Public Fund Diversion
The banking crisis deepened after financial regulators intervened to seize Ueno Bank on Tuesday, immediately freezing personal deposits and payment cards for nearly three million citizens. The sudden liquidity freeze locked more than half of Paraguay's population out of their personal savings, provoking street protests across major urban centers. Frustrated depositors formed extensive queues outside bank branches across Asuncion before public demonstrations degenerated into clashes with security forces utilizing tear gas. Paraguay's central bank stated on Saturday that approximately 1.2 million customers had received partial or total reimbursements through national deposit insurance mechanisms. Despite initial disbursements, public anger remains widespread as hundreds of thousands of depositors continue waiting to recover frozen personal funds. Paraguay's largest teachers' union, with more than 40,000 members, organized an indefinite nationwide strike starting Monday to demand the legal protection of public pension funds, according to CBC News.
Nationwide Protests and Presidential Succession
Vice President Pedro Alliana assumed executive office on Friday as interim president, committing to serve out the remaining constitutional term ending in 2028. Addressing the national crisis, Pedro Alliana promised that affected depositors would receive full compensation, declaring that citizens experiencing hardship would not be abandoned. However, civic groups expressed skepticism toward Pedro Alliana, who belongs to the ruling Colorado Party and faces scrutiny regarding past institutional ties to the failed bank. Senate President Basilio Nunez declared Santiago Pena guilty of dereliction of duty, while opposition lawmakers described the institutional collapse as a historic national corruption crisis. The legal proceedings against Santiago Pena and central bank regulators mark a significant reckoning for Paraguay's financial and constitutional governance.