Paraguayan court orders preventive detention of Santiago Peña after impeachment

The former president of Paraguay Santiago Peña was placed under preventive detention this Saturday (7), after being accused of involvement in a banking crisis that left millions of account holders without access to their deposits and sparked a wave of protests in the country. He was impeached on Friday (6).

The judge responsible for the case considered that there is a risk of flight for the former president. The defense, however, disputes this assessment and states that there are no elements that indicate the possibility of him leaving the country or obstructing the investigations. He also argues that Peña no longer holds the Presidency.

The former Paraguayan leader is being investigated for alleged breach of trust and self-serving administration in an investigation into irregularities at Ueno Bank, the country's main digital bank and whose controlling group had the former president as a shareholder until 2025.

Earlier, the Public Ministry had requested Peña's preventive detention and the freezing of his assets. After a hearing with the former president and his lawyer, judge Humberto Otazú accepted the request and ordered the detention. According to the magistrate, the politician will be detained at the Presidential Escort Regiment, in Asunción, where he had already spent Friday night.

The day before, Peña had been detained at his residence, on the outskirts of the Paraguayan capital. His dismissal capped a turbulent week, marked by the fraud scandal involving Ueno Bank, which before the crisis had 2.9 million customers — the country has around 7 million inhabitants.

Early in the morning, protesters who gathered near the property in protest led the country's authorities to transfer the politician to the Presidential School Regiment, which is located among other military units in the Ciudad Nueva neighborhood.

Lawyer Macarena Chilavert, 38, protested in front of the Public Ministry building while Peña gave testimony. "Be afraid of the Paraguayan people, the people need to remember and punish these corrupt people in the next elections. I didn't vote for this economist, who they said was a genius and now he is detained," she said into a megaphone.

Public employee Carlos Sosa, 69, also left his home, close to the public agency building. He held a makeshift sign with the phrase "One by one, they all must fall."

"I'm outraged and I came to protest, because it's not just Peña, it's all of them from that group," he said. "I had deposits at Ueno, I left because I realized there was something strange there. It was a lot of money that no one knew where it came from," he said.

Peña is accused of favoring the Vázquez Group, Ueno's controller, and of failing to monitor the institution by the Central Bank. According to the investigation, he also allegedly interfered unduly in the body responsible for administering resources allocated to workers' pensions and health. Ueno Bank maintained almost R$4.5 billion in public resources, including Social Security funds.

In addition to blocking bank accounts, deposits, investments and other financial assets, prosecutors requested steps to locate properties, vehicles, equity interests and other assets registered in Peña's name.

The dismissal occurred after Peña lost the support of his own Colorado Party supporters. It was the second time since the return of democracy that a Paraguayan president was removed by impeachment.

With Peña's departure, then vice-president Pedro Alliana assumed the presidency on Friday. Also a member of the Colorado Party, he will have a mandate until August 2028.

Upon assuming the Presidency, Alliana promised to compensate those impacted by what she called a "financial disaster", with priority given to lower-income customers. The Central Bank reported this Saturday that it had already returned part of the deposits to almost 1.2 million customers and that the process would continue throughout next week. The institution also released a list of banks that would operate during the weekend.

The new president demanded speed in responding to the crisis. "I don't want anyone hesitant to lead this mission. I want results," he said on Friday, during the inauguration ceremony.

The crisis also provoked diplomatic demonstrations. President Luiz Inácio Lula da Silva (PT) congratulated Alliana and expressed his willingness to work with the new government in an open, frank and cooperative manner. The Brazilian leader also expressed his desire to welcome him to Brasília soon.