Ousted Paraguayan president placed under house arrest
Arrest ordered shortly after Senate removed him as president
Ousted Paraguayan president Santiago Peña was placed under house arrest Friday on suspicion of breach of trust and influence peddling, among other charges, shortly after the Senate removed him from office over the collapse of a government-linked bank that locked nearly half the country's six million people out of their savings.
All 44 senators present voted to remove Peña for misconduct in office, making him the second Paraguayan president ousted by impeachment since the end of Gen. Alfredo Stroessner's 35-year dictatorship in 1989.
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him → oust → 1989
As the verdict came down, ending what had been seen as one of South America's most stable presidencies, a roar rose from the crowds packed into the plaza outside Congress.
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roar → come → Congress
Depositors, retirees and students in national soccer jerseys waved Paraguayan flags, sang and hugged, chanting "Dictatorship never again!"
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Depositors → wave → flags
Regulators had seized Ueno Bank just three days earlier, sending shock waves through the financial system and setting off the country's worst political crisis in more than a decade.
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Regulators → seize → decade
Peña was ordered to remain at one of his homes in Asunción until he appears before prosecutors Saturday morning on charges of breach of trust, influence peddling and using public office for personal gain, the most serious of which carry up to 10 years in prison.
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serious → order → prison
Lawmakers accuse him of using his political influence to steer hundreds of millions of dollars in public funds into Ueno while regulators overlooked risky insider lending.
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regulators → accuse → lending
Peña has denied any wrongdoing.
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Peña → deny → wrongdoing
Police ringed the house Friday night as crowds gathered outside, waving flags and vowing to keep vigil until morning to make sure he didn't escape.
Prosecutors also ordered the arrest of Carlos Carvallo, who ran the finance company that became Ueno until Peña named him central bank chief in 2023.
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Peña → ring → 2023
Vice-President Pedro Alliana was sworn in as president Friday to serve out the term, which ends in August 2028.
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which → swear → August
"The Paraguay we receive today has urgent needs," said Alliana, who also is under investigation in connection with the bank's collapse, inherits a government under pressure to return depositors' money and punish those responsible.
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who → receive → those
People protest against the government and Ueno Bank in Asunción, Paraguay, on Wednesday.
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People → protest → Wednesday
In a farewell message before the verdict, Peña said that he did not want his "presence to be a cause of greater division or instability.
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presence → say → division
"
"I say goodbye with gratitude, without ignoring the anguish of those who are waiting for answers today," he wrote.
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he → say → answers
Growing public outrage
Public outrage has become more thunderous by the day.
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outrage → grow → day
As senators deliberated Friday, protesters demanding their frozen savings back and accountability for Ueno's failure marched through downtown Asunción chanting, "Santi Peña to Tacumbú!" — a reference to the capital's main prison, where Ueno's founder and former CEO, Miguel Vázquez, is now being held.
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founder → deliberate → prison
"This was an enormous betrayal of trust," said Yinal López, a worker at the state electricity company, whose employee pension fund also had money at Ueno.
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fund → say → Ueno
Peña's fall, from feted Washington ally meeting with U.S. Treasury Secretary Scott Bessent in late October to prisoner in his own home, came at dizzying speed.
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fall → fete → speed
Ueno was seized before dawn on Tuesday.
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Ueno → seize → Tuesday
By Thursday afternoon, Peña had offered to resign as his conservative Colorado Party turned on him, led by former president Horacio Cartes, the party chief and Peña's longtime mentor.
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Party → offer → Cartes
By Friday, he was under arrest, with impeachment denying him the immunity he would have enjoyed if the Senate had accepted his resignation.
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Senate → deny → resignation
A telegenic technocrat and a former International Monetary Fund economist, Peña owed his political ascent to Cartes, a tobacco magnate who made him finance minister and twice backed him for president.
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him → owe → president
'Like a Shakespearean drama'
Once in office, though, Peña quietly amassed a rival power base, analysts say.
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analysts → amass → base
Ueno, flush with public funds, became its linchpin.
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Ueno → become → funds
He tried to displace his mentor, his political patron," said Miguel Carter, director of DEMOS, a Paraguayan research centre.
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Carter → try → DEMOS
"But he did so on very fragile grounds."
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he → do → grounds
Police stand guard outside of a closed Ueno Bank branch in Nemby, Paraguay, on Tuesday.
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Police → stand → Tuesday
Cartes struck back.
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Cartes → strike → ?
In September, senators loyal to him demanded answers from the central bank about Ueno's lending, citing leaked internal reports that warned its loans to related companies put its solvency at risk.
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loans → demand → risk
When Ueno collapsed this week, so did Peña's leverage, and Cartes, once sanctioned by the U.S. Treasury over alleged corruption, publicly called for the ouster of his erstwhile protégé.
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Cartes → collapse → protégé
"Cartes put the nail in the coffin," said Andrew Nickson, a Paraguay expert at the University of Birmingham.
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Nickson → put → Birmingham
"Peña had no political base to rely on, and he was left high and dry."
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he → have → base
The Aporia
