Paraguay’s Senate impeached President Santiago Pena on Friday over a banking crisis that left millions of people unable to access their deposits.
Senators voted overwhelmingly to impeach Pena for misconduct in office.
This decision allowed Vice President Pedro Alliana to succeed him. He will serve the remainder of the presidential term, which ends in August 2028.
Pena had already resigned Thursday, but by impeaching and convicting him instead of accepting his resignation, senators stripped him of his lifetime Senate seat and the immunity granted to former presidents, leaving him vulnerable to prosecution.
Following the Senate vote, prosecutors ordered the ousted president’s arrest alongside former central bank chief Carlos Carvallo as part of a criminal investigation.
Authorities later said Pena had been placed under house arrest pending a decision by prosecutors on the final charges against him.
Dozens of protesters gathered outside his residence in the capital Asuncion, while police maintained a security cordon around the property.
Why was Pena indicted?
Pena’s rapid fall came amid growing pressure over the collapse of digital bank Ueno, one of the country’s largest banks, with which he had ties.
The bank’s accounts – also used to process pension payments – are frozen, leaving millions of customers unable to access their money. Ueno also held hundreds of millions of dollars in public funds.
Pena’s resignation Thursday follows the withdrawal of support from Congress President Basilio Nunez and the leader of the ruling conservative Colorado Party, Horacio Cartes.
Thirty-five opposition lawmakers and ruling party dissidents submitted articles of impeachment to the 80-seat Chamber of Deputies, accusing Pena of conflicts of interest, misuse of pension funds and institutional cover-up linked to Ueno.
Pena sold his stake in Ueno Holding, whose operations include banking, in April 2025. Lawmakers also cited two loans he received from Ueno as part of allegations of improper financial gain.
They alleged inappropriate presidential interference in the Social Security Institute, known as IPS, and preferential treatment for Ueno. IPS manages the retirement and health funds of most Paraguayan workers and held $355 million in the bank, or about 9 percent of its investments, according to Chief Financial Officer Gladys Vera.
The motion also calls into question Pena’s 2023 appointment of central bank chief Carvallo, who previously chaired Financiera Ueno. According to the document, the central bank approved the transformation of the company into a bank just 83 days after his appointment.
What happened to Ueno Bank?
Ueno served approximately 2.94 million customers, or approximately 60% of Paraguay’s adult population.
Last month, the bank said it held about $800 million in public sector deposits – about a quarter of its total deposits – including money from the operators of Paraguay’s giant hydroelectric dams.
Paraguay’s central bank ordered a resolution or closure process on Tuesday after finding that Ueno’s solvency ratio had fallen below half of the required minimum.
Ueno’s app, card payments and transfers stopped working, while branches closed, leaving customers queuing outside, unable to withdraw their savings.
Hundreds of employees of Ueno and other companies of the parent conglomerate demonstrated in front of the Labor Ministry on Thursday, demanding unpaid wages and severance pay.
The day before, retirees, depositors, students and workers marched in Asuncion to demand Pena’s removal and hold signs saying “Give us back our money.”
What did the authorities do?
Authorities arrested eight top executives, including founder Miguel Vazquez and bank president Juan Manuel Gustale. Prosecutors also charged 27 bank officials and business associates with crimes including breach of trust and attempted fraud.
Lawyers for several inmates said they needed time to review the allegations before commenting.
Pena sought to reassure his clients in a video message on Wednesday, promising legislation “that will return to every saver what they are entitled to as quickly as possible.”
The crisis also forced him to cancel his participation in the Ibero-American summit in Madrid.
Pena, a conservative economist, took office in August 2023 for a five-year term.
Editor’s note: This article, originally published on November 5, was updated on November 7 to reflect the latest developments.
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