Impeached Paraguay leader charged over shock implosion of bank

Paraguay's President Santiago Peña has been stripped of his powers and placed under house arrest following the collapse of Ueno Bank, which has left more than half of the nation's residents without access to their bank accounts. The impeachment took place on Friday, just minutes after lawmakers, including those from Peña's own party, unanimously voted to remove him from office.

Peña had previously offered to resign on Thursday, but his resignation was not accepted. Instead, senators impeached him and charged him with misconduct, rendering him immune from future presidential immunity. Peña, who once held shares in the bank's parent company, has denied any wrongdoing.

The impeachment charges against Peña allege conflicts of interest, manipulation of regulatory oversight, diversion of pension funds, and participation in a cover-up involving the central bank. He is scheduled to be questioned on Saturday regarding allegations of breach of trust, influence peddling, and misappropriation of funds. Prosecutor Silvia Margarita Gonzalez Vester confirmed these charges.

Peña's deputy, Pedro Alliana, was sworn in as the new interim president on Friday, promising to "not abandon" the millions affected by the financial scandal. Alliana pledged to compensate those impacted by the collapse, which will be provided until 2028.

The Ueno Bank's failure has left over half of Paraguay's population without access to their savings and pensions, following the bank's seizure by the country's central bank. Long lines of people seeking to withdraw money from Ueno branches formed in the capital, Asunción, on Tuesday and Wednesday. An estimated three million depositors remain unable to access their funds, leading to widespread public outrage, particularly in Asunción.

Protests erupted across the country in response, with thousands demanding the return of their money. Clashes with police occurred during demonstrations, with tear gas and water cannons used against the crowds.

Peña's impeachment was approved by a vote of 44 out of 45 senators, with one senator absent. He stated in a video announcing his resignation, "It was never my intention to betray the trust you placed in me," adding that his priority was the peace of mind of Paraguayans who entrusted their savings to the financial system. Senate President Basilio Núñez declared that Peña was found guilty of "dereliction of duty."

Senator Rafael Filizzola described the situation as the "biggest corruption scandal in our democratic history," expressing deep concern for the state, private citizens, and the country's credibility and image.

Analysts predict that Peña will face prosecution for the bank's collapse. His defense lawyer, Ricardo Preda, dismissed the allegations as a "reckless accusation" and labeled them "irresponsible and opportunistic."