Paraguay’s Senate Removes President Peña Over Ueno Bank Collapse

Paraguay’s Senate removed President Santiago Peña from office on Friday. All 44 senators present voted to convict him. One senator was absent. None voted against.

The Senate found him guilty of poor performance of duties over the collapse of Ueno Bank, a digital lender whose failure froze the accounts of about 3 million people. The vote ended a trial that lasted less than two days.

Peña tried to resign on Thursday. Congress would not accept it. The Chamber of Deputies voted 78-0 to impeach him instead, and the Senate opened a trial that night. A joint session of Congress met Thursday evening to take up the resignation, but lawmakers from Peña’s own Colorado Party walked out and the session lost its quorum.

Opposition lawmakers had argued against accepting the resignation. Under Paraguay’s constitution, a former elected president becomes a senator for life unless removed by impeachment, and that seat carries immunity from prosecution. Accepting the resignation, they said, would have let Peña keep those protections.

What removal means

Removal strips Peña of the lifetime Senate seat and the immunity that comes with it. It also opens the way for criminal charges over his role in the bank’s collapse, Bloomberg reported.

Vice President Pedro Alliana is to be sworn in as president and serve out the rest of Peña’s term, which runs to August 2028. Congress must then choose a new vice president, since less than two years of the term remain.

Alliana survived his own brush with impeachment on Thursday. The Chamber rejected a motion against him, 48 votes against to 30 in favor.

The trial

Peña did not appear to defend himself on Friday. The Senate had rejected his request for 72 more hours to prepare his defense, 39 votes to 3. Senators moved on without him and reviewed the evidence against him.

Eight deputies acted as prosecutors. The charges ran to five chapters, including conflicts of interest, misuse of pension funds and shielding the bank from scrutiny. Peña’s defense argued that regulators acted on their own and that the trial had lost its purpose once he offered to resign. The Senate rejected those arguments.

Paraguay has removed a president this fast before. In 2012, the Senate removed Fernando Lugo, 39 votes to 4, in a trial lasting about five hours.

The bank at the center of it

Ueno Bank had about 3 million customers in a country of 6.5 million people. That is roughly 60 percent of Paraguay’s adults.

The central bank moved to wind the bank down this week after finding its solvency ratio had fallen below half of the legal minimum. Accounts were frozen. Ueno held about $800 million in public deposits, including about $380 million from the state pension and health fund, according to the Associated Press.

The attorney general’s office opened three criminal investigations into the bank’s collapse, its supervision and the placement of public money there. Arrest warrants were issued for eight Ueno executives, who later turned themselves in, Reuters reported. The central bank began paying deposit guarantees on Friday, starting with customers holding up to 10 million guaraníes, about $1,565.

Peña held shares in Grupo Vázquez, the business group that controls Ueno, until March 2025. Lawmakers accuse him of conflicts of interest, misuse of pension funds and shielding the bank from scrutiny. He denies wrongdoing and has said the affair is a regulatory matter for the courts.

Peña has led Paraguay since August 2023. His own party turned on him this week: Colorado Party leader Horacio Cartes withdrew his support, and Colorado deputies joined the unanimous vote to impeach. Central bank chief Carlos Carvallo, who once ran Ueno’s predecessor, resigned on Tuesday at Peña’s request. Interior Minister Enrique Riera resigned on Thursday and returned to the Senate, where he could vote in the trial.