Paraguay President Peña under investigation, faces removal from office over bank collapse

Paraguayan President Santiago Peña is under criminal investigation following the collapse of a major digital bank, prosecutors announced, as the South American leader prepares to defend himself before the Senate against possible removal from office on Friday.

The crisis at Ueno Bank turned Peña’s long-ruling Colorado Party against him, a stunning reversal for the former International Monetary Fund economist who had enjoyed the backing of the country’s most powerful politicians and was welcomed in Washington just weeks ago as a key ally of the Trump administration.

In a day of lightning-speed developments, Peña offered his resignation Thursday via X, with the lower house voting unanimously to impeach him moments later. Both houses declined to accept Peña’s offer to resign, with the Senate instead deciding to press forward with a trial that could result in the president’s removal from office.

Opposition senators are continuing to demand that Peña be removed from office, arguing that allowing him to resign would preserve his eligibility to become a senator for life, with legal protections that could prevent his prosecution, should Paraguay’s Attorney General Emiliano Rolón Fernández opt to file charges.

Rolón has ordered three criminal investigations into the Ueno Bank crisis, including allegations involving Peña and other current and former government officials, the prosecutor’s office said Thursday.

The investigations will examine authorities’ oversight of the bank, their handling of its failure and the placement of public funds in the lender.

Peña said he would cooperate with investigators.

“Whatever the outcome of this process, I will act with responsibility and respect for the Constitution,” he said on X.

Earlier Thursday, Peña said in a video posted to X that he was stepping down in the interest of “the stability of our country, social peace and the need to preserve our democratic institutions.”

Peña, who until last year held a stake in a company linked to Ueno, expressed contrition. But he stopped short of accepting responsibility for the turmoil, which has left millions of depositors, retirees and workers scrambling to recoup their frozen savings and unpaid wages. If he’s removed from office, Vice President Pedro Alliana would replace him as Paraguay’s leader.

Source: Apnews