Paraguay's Congress removed President Santiago Peña from office on Friday and he was placed under house arrest, a stunning downfall set in motion by the collapse of a prominent U.S.-owned bank with ties to his government. The bank's failure has left millions of people across the country unable to reach their money.
Peña, considered one of Washington's closest allies in the region, was a shareholder in Ueno Bank, a digital lender that served roughly 3 million customers, more than half of Paraguay's adult population. The bank had previously said that over a million people opened their first-ever bank accounts through its services, which included generous cash back offers on groceries.
Peña had built his image as a pro-market leader determined to make it easier to do business in Paraguay. Legislators, however, said he put state assets in jeopardy and enriched himself through his connection to the lender.
Peña denied any wrongdoing, and on Thursday he announced that he would resign. Lawmakers refused to accept the resignation and pressed ahead with the impeachment process instead. During proceedings in the Senate on Friday, legislators unanimously found him guilty of malfeasance in office, according to the Senate's website. Prosecutors then accused him of a breach of trust, among other charges, before he was placed under house arrest.
On Saturday morning, Peña appeared before prosecutors as a trial against him proceeded. He is the first Paraguayan president to be forced from office since Fernando Lugo was ousted in 2012.
"I want to apologize to the Paraguayan people if I have failed you," Peña said in a speech posted to social media.
Vice President Pedro Alliana was sworn in as president to serve the remainder of Peña's term, which runs until August 2028. In a speech on Friday, Alliana said he would take action to compensate people whose money was lost in the bank's collapse.
Paraguay's central bank said it seized control of Ueno Bank on Tuesday after concluding that the lender's solvency ratio, a measure of a company's long-term financial viability, no longer met legal standards. Protests erupted across Asunción, the capital, in the wake of the seizure.
