Paraguay’s Senate on Friday voted to impeach and remove President Santiago Pena over the collapse of a major bank that locked almost half the country’s population out of their accounts and triggered widespread protests.
Senate President Basilio Nunez declared the president “guilty of poor performance in his duties” after 44 of the 45 senators voted in favour of impeachment, with one absent. Lawmakers from Pena’s own party backed the move. Pena, 47, did not attend the trial despite earlier pledging to defend himself.
Pena had offered to resign over the crisis, but lawmakers pressed ahead with impeachment, which prevents him from becoming a senator for life with immunity from prosecution, as former presidents can. Vice-President Pedro Alliana is preparing to complete the current term, which runs until 2028.
Around three million people have been unable to access their money since the Central Bank took control of Ueno Bank on Tuesday and froze its accounts over concerns about its solvency. The Central Bank’s deposit guarantee fund began advance payments to some affected depositors on Thursday, with a first phase of up to about US$1,600 going to clients who have no loans and hold an account at another bank or institution in Paraguay.
Ueno began as a small fintech company and grew rapidly into a major bank that handled state pensions and the accounts of several state entities. Until last year, Pena held a stake in Grupo Vazquez, which controlled Ueno. The opposition accuses him of a conflict of interest, which he denies, and the Attorney General’s office said it was investigating him over the supervision and resolution of the bank and the placement of public funds in it.
Pena apologised in an address to the nation on Thursday, saying it was never his intention to betray the trust placed in him. The scandal has also cost Central Bank president Carlos Carvallo and Interior Minister Enrique Riera their posts, and eight Ueno executives have been arrested.
Update: Prosecutors on Friday ordered Pena placed under house arrest on suspicion of breach of trust until he appears before the economic crimes unit on Saturday. He is the second Paraguayan president removed through impeachment since the country returned to democracy in 1989.